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Full-Text Articles in International Economics
Extreme Risks In Financial Markets And Monetary Policies Of The Euro-Candidates, Hubert Gabrisch, Lucjan T. Orlowski
Extreme Risks In Financial Markets And Monetary Policies Of The Euro-Candidates, Hubert Gabrisch, Lucjan T. Orlowski
WCBT Faculty Publications
This study investigates extreme tail risks in financial markets of the euro-candidate countries and their implications for monetary policies. Our empirical tests show the prevalence of extreme risks in the conditional volatility series of selected financial variables, that is, interbank rates, equity market indexes and exchange rates. We argue that excessive instability of key target and instrument variables should be mitigated by monetary policies. Central banks in these countries will be well-advised to use both standard and unorthodox (discretionary) tools of monetary policy while steering their economies out of the financial crisis and through the euro-convergence process.
Stages Of The Ongoing Global Financial Crisis: Is There A Wandering Asset Bubble?, Lucjan Orlowski
Stages Of The Ongoing Global Financial Crisis: Is There A Wandering Asset Bubble?, Lucjan Orlowski
WCBT Faculty Publications
This study argues that the severity of the current global financial crisis is strongly influenced by changeable allocations of the global savings. This process is named a “wandering asset bubble”. Since its original outbreak induced by the demise of the subprime mortgage market and the mortgage-backed securities in the U.S., this crisis has reverberated across other credit areas, structured financial products and global financial institutions. Four distinctive stages of the crisis are identified: the meltdown of the subprime mortgage market, spillovers into broader credit market, the liquidity crisis epitomized by the fallout of Bear Sterns with some contagion effects on …