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Swing pricing allows a fund manager to transfer to redeeming or subscribing investors the costs associated with their trading activity, thus potentially discouraging large flows. This liquidity management tool, which is already used in major jurisdictions, may also help mitigate systemic risk. Here we develop and apply a methodology to investigate whether swing pricing does in fact help dampen flows out of funds, especially during periods of market stress. Drawing on evidence of first-mover advantage within a group of ‘swinging’ corporate bond funds, we provide policy considerations for enhancing the tool’s effectiveness as a systemic risk mitigant.

Banks and Banking --- Finance: General --- Financial Risk Management --- Public Finance --- Model Construction and Estimation --- Quantitative Policy Modeling --- Financial Crises --- Pension Funds --- Non-bank Financial Institutions --- Financial Instruments --- Institutional Investors --- General Financial Markets: Government Policy and Regulation --- Financing Policy --- Financial Risk and Risk Management --- Capital and Ownership Structure --- Value of Firms --- Goodwill --- International Financial Markets --- Taxation, Subsidies, and Revenue: General --- Portfolio Choice --- Investment Decisions --- Finance --- Financial services law & regulation --- Public finance & taxation --- Systemic risk --- Liquidity risk --- Asset management --- Risk mitigation in revenue administration --- Liquidity management --- Financial sector policy and analysis --- Financial regulation and supervision --- Asset and liability management --- Revenue administration --- Financial risk management --- Asset-liability management --- Liquidity --- Economics --- United States

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The nominal bond yields for advanced economies rose sharply during the first quarter of the year. This note analyzes the drivers of this increase across the jurisdictions and tenors of the yield curve. A key investor focus, in particular, has been the rise in the nominal bond yields in the United States, which has had notable global financial stability spillovers. The analysis indicates that the rise in inflation expectations is the primary driver of the rise in US nominal bond yields over the near term, whereas, the rise in real yields has been the major contributor to the rise in longer-term yields. The change in term premiums has also played a key role in driving both the longer-term inflation breakeven and real yields. Considering other major advanced economies, while inflation expectations have risen across the board in the near term, change in real yields appear more pertinent a driver for shifts in longer-term yields.

Economics: General --- Macroeconomics --- Inflation --- Banks and Banking --- Investments: Bonds --- Investments: General --- Informal Economy --- Underground Econom --- Foreign Exchange --- Price Level --- Deflation --- Interest Rates: Determination, Term Structure, and Effects --- General Financial Markets: General (includes Measurement and Data) --- Investment --- Capital --- Intangible Capital --- Capacity --- Economics of specific sectors --- Economic & financial crises & disasters --- Finance --- Investment & securities --- Economic sectors --- Financial crises --- Prices --- Yield curve --- Financial services --- Bond yields --- Financial institutions --- Return on investment --- National accounts --- Informal sector --- Economics --- Currency crises --- Interest rates --- Bonds --- Saving and investment --- United States

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This paper explores the determinants of profitability across large euro area banks using a novel approach based on conditional profitability distributions. Real GDP growth and the NPL ratio are shown to be the most reliable determinants of bank profitability. However, the estimated conditional distributions reveal that, while higher growth would raise profits on average, a large swath of banks would most likely continue to struggle even amid a strong economic recovery. Therefore, for some banks, a determined reduction in NPLs combined with cost efficiency improvements and customized changes to their business models appears to be the most promising strategy for durably raising profitability.

Eurozone. --- Bank profits. --- Europe. --- Gay culture Europe --- Europe --- Bank earnings --- Profit --- Euro area --- Euro zone --- Monetary unions --- Banks and Banking --- Finance: General --- Macroeconomics --- Industries: Financial Services --- Banks --- Depository Institutions --- Micro Finance Institutions --- Mortgages --- General Financial Markets: Government Policy and Regulation --- Personal Income, Wealth, and Their Distributions --- Interest Rates: Determination, Term Structure, and Effects --- Financial Institutions and Services: Government Policy and Regulation --- Finance --- Banking --- Financial services law & regulation --- Bank soundness --- Nonperforming loans --- Personal income --- Yield curve --- Financial sector policy and analysis --- Financial institutions --- National accounts --- Financial services --- Loan loss provisions --- Financial regulation and supervision --- Banks and banking --- Loans --- Income --- Interest rates --- State supervision --- France

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A Comprehensive Multi-Sector Tool for Analysis of Systemic Risk and Interconnectedness (SyRIN).

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Using panel quantile regressions for 11 advanced and 10 emerging market economies, we show that the conditional distribution of GDP growth depends on financial conditions, with growth-at-risk (GaR)—defined as growth at the lower 5th percentile—more responsive than the median or upper percentiles. In addition, the term structure of GaR features an intertemporal tradeoff: GaR is higher in the short run; but lower in the medium run when initial financial conditions are loose relative to typical levels, and the tradeoff is amplified by a credit boom. This shift in the growth distribution generally is not incorporated when solving dynamic stochastic general equilibrium models with macrofinancial linkages, which suggests downside risks to GDP growth are systematically underestimated.

Banks and banking --- Agricultural banks --- Banking --- Banking industry --- Commercial banks --- Depository institutions --- Finance --- Financial institutions --- Money --- Finance. --- Finance: General --- Macroeconomics --- Money and Monetary Policy --- International Business Cycles --- Monetary Growth Models --- Monetary Policy, Central Banking, and the Supply of Money and Credit: General --- General Financial Markets: Government Policy and Regulation --- Financial Markets and the Macroeconomy --- Monetary economics --- Growth-at-risk assessment --- Credit booms --- Credit --- Financial sector risk --- Macrofinancial linkages --- Financial sector policy and analysis --- Financial risk management --- Financial services industry --- United States