The International Monetary Fund: Its Present Role in Historical Perspective

In this paper we describe what the IMF is and what it does. We consider its origins as the guardian of the Bretton Woods adjustable peg exchange rate system and financier of temporary current account deficits for advanced countries, to its present primary roles as development financier and crisis manager for the emerging world. We consider the externalities or market failures that the IMF is believed by many to correct and the public goods that the IMF provides. Critics of the IMF downplay the extent of market failure and the scope of public goods provided. They attach greater importance to market solutions. We consider their views as well. We conclude with a discussion of the case for reform in the light of historical experience.

Policing in pandemics: A systematic review and best practices for police response to COVID-19

The COVID-19 pandemic has created a range of unforeseen and unprecedented challenges for police departments worldwide. In light of these challenges, the goal of this review is to understand the potential short- and long-term effects of disasters and public health emergencies on policing organisations and officers. A total of 72 studies were eligible for inclusion, based on their focus on policing and police work during and in the aftermath of natural disasters and public health emergencies. Through an extensive review, we compile and analyse the most common issues and best practices identified in the literature, and discuss ‘what works’ in the context of policing such emergencies. The literature reveals four categories of issues predominantly raised in this context, namely police-community relations, the mental health and wellbeing of officers, intra-organisational challenges, as well as inter-agency collaboration and cooperation. Based on our review and analysis, we offer a list of recommendations relevant for policing the current COVID-19 outbreak. The findings of this review have immediate implications for policing during COVID-19 but also cover long-term effects, providing valuable recommendations for after the crises has passed

Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’

The main thesis of this paper is that the ultimate cause of the current global financial crisis is to be found in the deeply flawed institutions and practices of what is often referred to as the New Financial Architecture (NFA) – a globally integrated system of giant bank conglomerates and the so-called ‘shadow banking system’ of investment banks, hedge funds and bank-created Special Investment Vehicles. The institutions are either lightly and badly regulated or not regulated at all, an arrangement defended by and celebrated in the dominant financial economics theoretical paradigm – the theory of efficient capital markets. The NFA has generated a series of ever-bigger financial crises that have been met by larger and larger government bailouts. After a brief review of the historical evolution of the NFA, the paper analyses its structural flaws. The problems discussed in order are: 1) the theoretical foundation of the NFA – the theory of efficient capital markets – is very weak and the celebratory narrative of the NFA accepted by regulators is seriously misleading; 2) widespread perverse incentives embedded in the NFA generated excessive risk-taking throughout financial markets; 3) mortgage-backed securities central to the boom were so complex and nontransparent that they could not possibly be priced correctly; their prices were bound to collapse once the excessive optimism of the boom faded; 4) contrary to the narrative, excessive risk built up in giant banks during the boom; and 5) the NFA generated high leverage and high systemic risk, with channels of contagion that transmitted problems in the US subprime mortgage market around the world. Understanding the profound problems of the NFA is a necessary step toward the creation of a new and improved set of financial institutions and practices likely to achieve core policy objectives such as faster real sector growth with lower inequality. JEL Categories:

Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’

This PERI Working Paper argues that the ultimate cause of the current global financial crisis is to be found in the deeply flawed institutions and practices of what is often referred to as the New Financial Architecture (NFA) – a globally integrated system of giant bank conglomerates and the so-called ‘shadow banking system’ of investment banks, hedge funds and bank-created Special Investment Vehicles. These institutions are either lightly and badly regulated or not regulated at all, an arrangement defended by and celebrated in the dominant financial economics theoretical paradigm – the theory of efficient capital markets. The NFA has generated a series of ever-bigger financial crises that have been met by larger and larger government bailouts. After a brief review of the historical evolution of the NFA, this paper analyses its structural flaws: 1) the theoretical foundation of the NFA – the theory of efficient capital markets – is very weak and the celebratory narrative of the NFA accepted by regulators is seriously misleading; 2) widespread perverse incentives embedded in the NFA generated excessive risk-taking throughout financial markets; 3) mortgage-backed securities central to the boom were so complex and nontransparent that they could not possibly be priced correctly; their prices were bound to collapse once the excessive optimism of the boom faded; 4) contrary to the narrative, excessive risk built up in giant banks during the boom; and 5) the NFA generated high leverage and high systemic risk, with channels of contagion that transmitted problems in the US subprime mortgage market around the world. Understanding the profound problems of the NFA is a necessary step toward the creation of a new and improved set of financial institutions and practices likely to achieve core policy objectives such as faster real sector growth with lower inequality.

ADDRESSING CASCADING CONSEQUENCES FOR CRITICAL INFRASTRUCTURE AND VITAL SOCIETAL FUNCTIONS IN FLOODING EVENTS

Although there have been significant advances in the research field of critical infrastructures and vital societal functions during the last decade, there still exist many challenges in implementing and carrying out studies in practice. One of these challenges is a feasible method for mapping, analysing and visualising the cascading consequences that arise for critical infrastructures and societal functions affected by large spatial hazards. The presented study is the result from commissioned work for the Swedish Civil Contingencies Agency (MSB), aiming at contributing to improved risk, vulnerability and continuity management for regions in Sweden at risk of being affected by severe spatial hazards. The study takes it basis from, and connects to, ongoing work in Sweden relating to the risk of severe flooding events in accordance to the EU Floods Directive and work related to critical infrastructure protection in accordance to the EU Directive on European Critical Infrastructures. The results from the study where mainly derived through a literature review and workshops, utilising a flood prone region in Sweden as a case. The literature review focused on methods and approaches, both scientific and in grey literature, for estimation, visualisation and weighing of consequence arising for critical infrastructures and vital societal functions for large spatial hazards. Here a specific focus was on literature addressing the issue of interdependencies and the use of GIS. The workshops involved participants from critical infrastructure operators, municipalities, regional county boards, MSB, Statistics Sweden, among others, aiming at the practical needs and challenges for a method and for testing the developed method. From the literature review it was clear that most studies focus on analysing the direct consequences of large spatial hazards. Only few studies address the indirect consequences that arise due to interdependencies, revealing that indirect consequences can be as high or higher than the direct consequences. This necessitates the need for addressing indirect consequences systematically. The review also highlighted that the required underlying data is not easily attainable and comes with several challenges with respect to collection, analysis and visualization of the results for decision making. The developed method is concluded to both fulfil a need, as expressed by the participants in the workshops, and was considered as a feasible approach to start addressing the issue of cascading consequences during large spatial events. However, we also conclude that, based on the literature review and the practical challenges present in this area, ample research opportunities exist

Two centuries of systemic bank runs

We study the macroeconomic causes and consequences of bank runs in 184 countries over the period of 1800-2022. A new narrative chronology of bank run events coupled with a newly constructed historical dataset on banking sector deposits allows us to distinguish between systemic bank runs—those associated with substantial declines in aggregate deposits—and non-systemic episodes. We find that bank runs are typically associated with large contractions in deposits, credit, and output, as well as exchange rate crashes and sudden stops. Whether deposits contract during runs, in turn, predicts the severity of output declines, highlighting that bank runs are particularly costly when they are systemic in nature. Using several sources of historical and contemporary bank-level data, we show that systemic bank runs are associated with a wide dispersion in deposit growth rates and a flow of deposits from more leveraged to safer banks. Taken together, our analysis highlights a key role for the liability side of banks in financial crises, and our new quantitatively validated measure of bank runs provides unprecedented scope for studying such episodes

Structural Causes of the Global Financial Crisis: A Critical Assessment of the ‘New Financial Architecture’

The main thesis of this paper is that the ultimate cause of the current global financial crisis is to be found in the deeply flawed institutions and practices of what is often referred to as the New Financial Architecture (NFA) – a globally integrated system of giant bank conglomerates and the so-called ‘shadow banking system’ of investment banks, hedge funds and bank-created Special Investment Vehicles. The institutions are either lightly and badly regulated or not regulated at all, an arrangement defended by and celebrated in the dominant financial economics theoretical paradigm – the theory of efficient capital markets. The NFA has generated a series of ever-bigger financial crises that have been met by larger and larger government bailouts. After a brief review of the historical evolution of the NFA, the paper analyses its structural flaws. The problems discussed in order are: 1) the theoretical foundation of the NFA – the theory of efficient capital markets – is very weak and the celebratory narrative of the NFA accepted by regulators is seriously misleading; 2) widespread perverse incentives embedded in the NFA generated excessive risk-taking throughout financial markets; 3) mortgage-backed securities central to the boom were so complex and nontransparent that they could not possibly be priced correctly; their prices were bound to collapse once the excessive optimism of the boom faded; 4) contrary to the narrative, excessive risk built up in giant banks during the boom; and 5) the NFA generated high leverage and high systemic risk, with channels of contagion that transmitted problems in the US subprime mortgage market around the world. Understanding the profound problems of the NFA is a necessary step toward the creation of a new and improved set of financial institutions and practices likely to achieve core policy objectives such as faster real sector growth with lower inequality

Training of Crisis Mappers and Map Production from Multi-sensor Data: Vernazza Case Study (Cinque Terre National Park, Italy)

This aim of paper is to presents the development of a multidisciplinary project carried out by the cooperation between Politecnico di Torino and ITHACA (Information Technology for Humanitarian Assistance, Cooperation and Action). The goal of the project was the training in geospatial data acquiring and processing for students attending Architecture and Engineering Courses, in order to start up a team of "volunteer mappers". Indeed, the project is aimed to document the environmental and built heritage subject to disaster; the purpose is to improve the capabilities of the actors involved in the activities connected in geospatial data collection, integration and sharing. The proposed area for testing the training activities is the Cinque Terre National Park, registered in the World Heritage List since 1997. The area was affected by flood on the 25th of October 2011. According to other international experiences, the group is expected to be active after emergencies in order to upgrade maps, using data acquired by typical geomatic methods and techniques such as terrestrial and aerial Lidar, close-range and aerial photogrammetry, topographic and GNSS instruments etc.; or by non conventional systems and instruments such us UAV, mobile mapping etc. The ultimate goal is to implement a WebGIS platform to share all the data collected with local authorities and the Civil Protectio