https://hdl.handle.net/10419/7 2026-10-09T06:57:44Z https://hdl.handle.net/10419/142155 Title: End of the sovereign-bank doom loop in the European Union? The bank recovery and resolution directive Authors: Covi, Giovanni; Eydam, Ulrich Abstract: In this paper we examine the relationship between the default risk of banks and sovereigns, i.e. the 'doom-loop'. Specifically we try to assess the effectiveness of the implementation of the new recovery and resolution framework. We use a panel with daily data on European banks and sovereigns ranging from 2008 to 2016. We find that there was a pronounced feedback loop between banks and sovereigns from 2008 to 2014. However, this feedback loop seems to have disappeared after the implementation of the new regulatory framework. This finding is robust across several specifications. 2016-01-01T00:00:00Z https://hdl.handle.net/10419/103752 Title: The role of sentiment in the provision of credit Authors: Meyer, Björn O. Abstract: The provision of credit has been shown to be eminent for macroeconomic activity. Recent research highlighted that optimism may play a role in the provision of credit through leverage cycles. A decomposition of corporate bond spreads allows the modelling of a propensity-to-lend through an excess bond premium. In the US economy, optimism in various sentiment measures causes within a VAR model, including other financial market variables, a fall of this excess bond premium and therefore increase the propensity-to-lend. Use of the Michigan Consumer Sentiment Index and animal spirit indices show a variation of information content in sentiment and different types of animal spirits. The overall reaction to positive animal spirits seems to be dominated by a positive response of the credit provision and its subsequent reversal, while an increase in the MCSI causes a more persistent positive response. 2014-01-01T00:00:00Z https://hdl.handle.net/10419/98748 Title: Changes in the Response of Fiscal Policy to Monetary Policy in the EMU Authors: Arora, Sanchit; Reicher, Claire Abstract: We study the evolution of the response of fiscal policy to monetary policy shocks in the EMU in the light of two important events: the signing of the Maastricht treaty in 1992 and the introduction of the EMU in 1999. Based on impulse responses from a panel VAR, we find that fiscal and monetary policy acted neutrally toward each other before the Maastricht Treaty; fiscal and monetary policy acted as substitutes immediately after the Maastricht Treaty; and fiscal and monetary policy acted as complements after the introduction of the EMU. These results holds for a set of 11 non-EMU countries as well, which indicates that the evolution of the fiscal response to monetary shocks within the EMU has broadly mirrored global developments. One example of such a global development is the global shift toward lower interest rates and tighter fiscal policy during the 1990s. 2014-01-01T00:00:00Z https://hdl.handle.net/10419/103753 Title: Foreign direct investment and trade: A bi-directional gravity approach Authors: Harach, Monika; Rodriguez-Crespo, Ernesto Abstract: This paper compares the traditional gravity model with a bidirectional approach when multilateral resistance is implemented to analyze the effect of inward foreign direct investment (FDI) on exports. We use cross-sectional HS trade data disaggregated at a 6-digit level in 2010 with controls for HS 2-digit level. Our results show that FDI increases exports only in the in the direction of exporter-importer, and the effect is higher when multilateral resistance is implemented and the effect is different across sections. Our robustness checks show that when FDI is removed, the coefficients and the effect on sectors are similar. 2014-01-01T00:00:00Z