This paper links banking with asset prices in a monetary macroeconomic model. The main innovation is to consider how falling asset prices affect the banking system through wide-spread borrower default, while deriving explicit solutions and balance sheet effects even far from the steady state. The paper finds that the effect...
Banks in developing economies often face a mismatch in the currency denomination of their liabilities foreign currency denominated debt and assets domestic currency loans to domestic borrowers. This paper studies the effect of this mismatch on business cycles and monetary policy in a sticky-price, dynamic general equilibrium model of a...
Question-and-Answer Session Operator Operator Instructions. Our first question today will come from Bose George with KBW. Bose George - KBW Hey, good morning. I had a question on the CP roll. Could you just go over how the discussions with the bank are going? Also, since the government is...
