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Bank profits are high in Sub-Saharan Africa (SSA) compared to other regions. This paper uses a sample of 389 banks in 41 SSA countries to study the determinants of bank profitability. We find that apart from credit risk, higher returns on assets are associated with larger bank size, activity diversification, and private ownership. Bank returns are affected by macroeconomic variables, suggesting that macroeconomic policies that promote low inflation and stable output growth does boost credit expansion. The results also indicate moderate persistence in profitability. Causation in the Granger sense from returns on assets to capital occurs with a considerable lag, implying that high returns are not immediately retained in the form of equity increases. Thus, the paper gives some support to a policy of imposing higher capital requirements in the region in order to strengthen financial stability.

Finance --- Business & Economics --- Banking --- Bank profits --- Banks and banking --- Bank earnings --- Agricultural banks --- Banking industry --- Commercial banks --- Depository institutions --- Profit --- Financial institutions --- Money --- Banks and Banking --- Finance: General --- Investments: Stocks --- Macroeconomics --- Inflation --- Financial Markets and the Macroeconomy --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- General Financial Markets: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- Personal Income, Wealth, and Their Distributions --- Price Level --- Deflation --- Financial services law & regulation --- Investment & securities --- Bank soundness --- Credit risk --- Stocks --- Personal income --- Financial sector policy and analysis --- Financial regulation and supervision --- National accounts --- Prices --- Financial risk management --- Income --- United States

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We document the short-term impact of the COVID-19 pandemic on the Brazilian labor market focusing on employment, wages and hours worked using the nationally representative household surveys PNAD-Continua and PNAD COVID. Sectors most susceptible to the shock because they are more contact-intensive and less teleworkable, such as construction, domestic services and hospitality, suffered large job losses and reductions in hours. Given low income workers experienced the largest decline in earnings, extreme poverty and the Gini coefficient based on labor income increased by around 9.2 and 5 percentage points, respectively, due to the immediate shock. The government’s broad based, temporary Emergency Aid transfer program more than offset the labor income losses for the bottom four deciles, however, such that poverty relative to the pre-COVID baseline fell. At a cost of around 4 percent of GDP in 2020 such support is not fiscally sustainable beyond the short-term and ended in late 2020. The challenge will be to avoid a sharp increase in poverty and inequality if the labor market does not pick up sufficiently fast in 2021.

Labor --- Macroeconomics --- Diseases: Contagious --- Personal Income, Wealth, and Their Distributions --- Employment --- Unemployment --- Wages --- Intergenerational Income Distribution --- Aggregate Human Capital --- Aggregate Labor Productivity --- National Government Expenditures and Related Policies: General --- National Government Expenditures and Welfare Programs --- Particular Labor Markets: General --- Health Behavior --- Demand and Supply of Labor: General --- Unemployment: Models, Duration, Incidence, and Job Search --- Aggregate Factor Income Distribution --- Labour --- income economics --- Infectious & contagious diseases --- COVID-19 --- Labor markets --- Income --- Health --- National accounts --- Communicable diseases --- Economic theory --- Labor market --- Brazil --- Poverty. --- Poverty --- Labor. --- Macroeconomics. --- Diseases: Contagious. --- Personal Income, Wealth, and Their Distributions. --- Employment. --- Unemployment. --- Wages. --- Intergenerational Income Distribution. --- Aggregate Human Capital. --- Aggregate Labor Productivity. --- National Government Expenditures and Related Policies: General. --- National Government Expenditures and Welfare Programs. --- Particular Labor Markets: General. --- Health Behavior. --- Demand and Supply of Labor: General. --- Unemployment: Models, Duration, Incidence, and Job Search. --- Aggregate Factor Income Distribution. --- Labour. --- income economics. --- Infectious & contagious diseases. --- COVID-19. --- Labor markets. --- Income. --- Health. --- National accounts. --- Communicable diseases. --- Economic theory. --- Labor market. --- Philosophy. --- Brazil.

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Credit is key to support healthy and sustainable economic growth but excess aggregate credit growth can signal the build-up of imbalances and lead to systemic financial crisis. Hence, monitoring the credit cycle is key to identifying vulnerabilities, particularly in emerging markets, which tend to be more exposed to sudden external shocks and reversal in capital flows. We estimate the credit cycle in Central America, Panama, and the Dominican Republic and find that the creadit gap is a powerful predictor of systemic vulnerability in the region. We simulate the activation of the Basel III countercyclical capital buffers and discuss the macroprudential policy implications of the results, arguing that countercyclical macroprudential policies based on the credit gap could prove useful to enhance the resilience of the region’s financial sector but the activation of macroprudential instruments should also be informed by the development of other macrofinancial variables and by expert judgment.

Banks and Banking --- Macroeconomics --- Money and Monetary Policy --- Industries: Financial Services --- Prices, Business Fluctuations, and Cycles: General (includes Measurement and Data) --- Financial Markets and the Macroeconomy --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- General Financial Markets: General (includes Measurement and Data) --- Financial Institutions and Services: General --- Financial Institutions and Services: Government Policy and Regulation --- Business Fluctuations --- Cycles --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- Finance --- Monetary economics --- Financial services law & regulation --- Credit cycles --- Nonperforming loans --- Credit gaps --- Credit --- Countercyclical capital buffers --- Financial sector policy and analysis --- Financial institutions --- Money --- Financial regulation and supervision --- Business cycles --- Loans --- Asset requirements --- El Salvador

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We study the effects of monetary policy shocks on employment gender gaps in a panel of 22 countries using quarterly data from 1990 to 2019. Our results show that men’s employment falls more than women’s after contractionary monetary policy shocks, narrowing the employment gender gap over time. Two factors contribute to explaining this heterogeneous effect. First, a larger impact of monetary policy shocks on employment in the industry sector that employs more men. Second, the larger response of the employment gap in the sector (services) that employs the largest share of men and women. In terms of labor market adjustment, the narrowing of the gender employment gap is initially driven by a reduction in the gender unemployment gaps that, over time, results in an adjustment in the gender labor force participation gap—with men’s labor force participation dropping more than women’s. The effects are larger in countries with more flexible labor market regulations, higher gender wage gaps, and lower informal women’s employment compared to men’s. Finally, the effects are also larger for contractionary monetary policy shocks and during expansions.

Aggregate Human Capital --- Aggregate Labor Productivity --- Currency crises --- Demand and Supply of Labor: General --- Economic & financial crises & disasters --- Economic theory --- Economics of Gender --- Economics of specific sectors --- Economics --- Economics: General --- Employment --- Equity, Justice, Inequality, and Other Normative Criteria and Measurement --- Gender inequality --- Gender Studies --- Gender studies --- Gender --- Income economics --- Informal sector --- Intergenerational Income Distribution --- Labor Force and Employment, Size, and Structure --- Labor market --- Labor markets --- Labor Standards: Labor Force Composition --- Labor --- Labour --- Macroeconomics --- Monetary Policy --- Non-labor Discrimination --- Sex discrimination --- Social discrimination & equal treatment --- Unemployment --- Unemployment: Models, Duration, Incidence, and Job Search --- Wages --- Women & girls --- Women --- Women's Studies