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Financial risks, monetary policy in the QE era, and regulation

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  • Kouretas, Georgios P.
  • Papadopoulos, Athanasios P.
  • Tavlas, George S.

Abstract

At the beginning of the present century, the literature on financial integration focused on the benefits of increased integration. In particular, the literature emphasized that a well-integrated financial system allows economic agents to engage in risk sharing while enhancing the smooth transmission of monetary policy. However, the international financial crisis of 2007-08 and the euro area sovereign debt crisis of 2009-15, brought to the fore the flip side of increased financial integration – namely, that higher financial integration among national jurisdictions creates the potential for destabilizing cross-country spillovers of capital flows. The papers in this Special Issue address financial system vulnerabilities in the aftermath of the 2007-08 financial crisis and the 2009-15 euro area crisis. In particular, the papers assess (1) vulnerabilities arising from such factors as the liberalization of financial systems, cross-country contagion, and climate change, and (2) policy responses, including macroprudential supervision and quantitative easing, to financial instabilities.

Suggested Citation

  • Kouretas, Georgios P. & Papadopoulos, Athanasios P. & Tavlas, George S., 2022. "Financial risks, monetary policy in the QE era, and regulation," Journal of Financial Stability, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finsta:v:63:y:2022:i:c:s1572308922000730
    DOI: 10.1016/j.jfs.2022.101051
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    Cited by:

    1. Giraldo, Carlos & Giraldo, Iader & Gomez-Gonzalez, Jose E. & Uribe, Jorge M., 2024. "Financial integration and banking stability: A post-global crisis assessment," Economic Modelling, Elsevier, vol. 139(C).
    2. Yang, Ronghai & Sun, Xiaowen & Wang, Honglei & Wang, Xiao, 2024. "A study of the time-varying impact of capital account liberalization on monetary policy rules in the open economy: Evidence from China," Finance Research Letters, Elsevier, vol. 65(C).

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