Determinants of the Venezuelan Banking Crisis of the Mid-1990s: An Event History Analysis

This paper uses event history analysis to test the significance of several macro-economic and bank-specific variables in explaining bank failures during the Venezuelan banking crisis of the mid-1990s. Poor bank profitability, proxied by a low net interest margin, and low GDP growth are found significant in increasing the probability of bank failure. Other useful indicators, for some model specifications, are the share of nonperforming loans and that of non productive assets to banks’ own funds, which raise the likelihood of crisis. A large amount of bank liquid assets, in turn, reduces the likelihood of failure for some model specifications. The opposite is true for high real deposit rates. Although it could be interpreted, at first sight, as a too restrictive monetary policy, this is not supported by the lack of significance of the real lending rate and, even more so, real money growth, a more direct indicator of the monetary policy stance.Venezuela, banking crisis, early indicators

The Asian and European Banking Systems: The case of Spain in the quest for development and stability

After a brief review of the literature on the determinants of financial development, the paper reviews the Asian and European financial systems in terms of their size and efficiency. It also compares the steps taken in the two regions in the quest for financial development and stability, which in a few cases are very similar but differ markedly in others. While there has been a clear move towards a more balanced financial structure in both regions, financial liberalization, as well as the strengthening of bank regulation and supervision occurred later in Asia and with a different speed and sequencing. The most striking difference between the two areas is the degree of international - and regional – financial integration, much lower for Asia. Finally, the case of Spain - as a European country with a finance-led convergence process - is analyzed in more detail. Lessons are drawn from the Spanish experience for Asian countries.Financial development, financial liberalization, Spanish financial system

Does the Chinese banking system benefit from foreign investors?

We find empirical evidence that the Chinese banking system has benefited from the entry of foreign investors through higher profitability and increased efficiency of the banking system. Foreign participation, which consists of a minority stake in a Chinese bank (in contrast to the typical pattern in emerging countries), appears to be most effective when the foreign bank acts as a strategic investor. Purely financial investors contribute little, if anything, to bank performance.China; banking system; foreign participation

Cyclist Injury Severity in Spain: A Bayesian Analysis of Police Road Injury Data Focusing on Involved Vehicles and Route Environment

This study analyses factors associated with cyclist injury severity, focusing on vehicle type, route environment, and interactions between them. Data analysed was collected by Spanish police during 2016 and includes records relating to 12,318 drivers and cyclist involving in collisions with at least one injured cyclist, of whom 7230 were injured cyclists. Bayesian methods were used to model relationships between cyclist injury severity and circumstances related to the crash, with the outcome variable being whether a cyclist was killed or seriously injured (KSI) rather than slightly injured. Factors in the model included those relating to the injured cyclist, the route environment, and involved motorists. Injury severity among cyclists was likely to be higher where an Heavy Goods Vehicle (HGV) was involved, and certain route conditions (bicycle infrastructure, 30 kph zones, and urban zones) were associated with lower injury severity. Interactions exist between the two: collisions involving large vehicles in lower-risk environments are less likely to lead to KSIs than collisions involving large vehicles in higher-risk environments. Finally, motorists involved in a collision were more likely than the injured cyclists to have committed an error or infraction. The study supports the creation of infrastructure that separates cyclists from motor tra c. Also, action needs to be taken to address motorist behaviour, given the imbalance between responsibility and risk.European Regional Development Fund (Ref. FEDER BU300P18)

Implications of the design of monetary policy for financial stability

This paper is a contribution to the literature on the factors behind financial stability, focusing on monetary policy design. In particular, it assesses empirically for a sample of 79 countries in the period 1970 to 2000 whether the choice of the central bank objectives and the monetary policy strategy affect financial stability. We find that focusing the central bank objectives on price stability reduces the likelihood of a banking crisis. This result is robust to several model specifications and groups of countries. As regards the monetary policy strategy, exchange rate targeting significantly reduces the likelihood of a banking crisis for some model specifications and, in particular, for the group of countries in transition.Monetary policy design, monetary policy objectives, monetary policy strategy, financial stability, and banking crisis

Europe in the midst of China-US strategic competition: What are the European Union’s options? Bruegel Working Paper Issue 03, April 2019

With the trade conflict between the United States and China bringing China-US strategic competition into the open, the European Union faces an urgent question: how to position itself in the competition. This paper reviews the impact of the US-led trade war against China and its immediate consequences for China, the US and the EU. Although protectionism can never be growth enhancing, European companies could see gains if the trade confrontation between China and the US ends up reducing their bilateral trade to the benefit of European companies that export to China. This is because US exports to China are concentrated in sectors that are also key for the EU’s exports to China, with the exception of energy and agricultural products. However, a solution to the US-China trade conflict that artificially increases Chinese imports from the US can only hurt European exporters. A much broader and structural deal which pushes China to reform and open up would not only be beneficial for the US but also for the EU and the rest of the world. Against this background, this paper reviews the EU’s options in the new world of strategic confrontation between China and the US. The most obvious option would be to continue to safeguard multilateralism, but the EU should not be naïve in remaining alone, among major economic blocs, pushing for such an option. The second option would be for the EU to become more reliant on the Transatlantic Alliance. The last option would be for the EU to move its centre of gravity towards China, or at least to remain neutral between the US and China. While it might seem unrealistic today, this last option might need to be explored if the US continues to move away from multilateralism and, to some degree, from the Transatlantic Alliance. For the time being, the European Commission seems to have stepped up its thinking about the necessary conditions for stronger economic cooperation with China, which is already an important step in this direction

José Luis Sánchez y Luis Cubillo: entre el románico y la vanguardia

Comunicación realizada a partir de una entrevista realizada al artista José Luis Sánchez, centrándose en su colaboración en la arquitectura religiosa de Luis Cubill

¿Saldrán ganadoras América Latina y Asia de la actual crisis financiera?

Sorprendentemente, los países emergentes no se están viendo afectados de forma significativa por la crisis financiera internacional. Este análisis explica las causas de este incipiente “desacoplamiento”. La crisis financiera que viene golpeando las economías desarrolladas, y de manera especial a EEUU, no acaba de trasladarse de manera contundente a los países emergentes, como había sido el caso anteriormente en episodios similares. Esta amortiguación del impacto sobre emergentes se explica por las numerosas fortalezas que han ido acumulando estas economías desde sus crisis en los 90, tales como el menor endeudamiento –sea del sector público como privado–, la mayor diversificación geográfica de su comercio exterior y la fortaleza de sus sistemas financieros. A pesar de los riesgos a este escenario –tales como el descontrol de la inflación, un fuerte aumento del riesgo país o una brusca caída de las materias primas en el caso de América Latina–, parece más probable que la posición relativamente favorable de las economías emergentes respecto a las desarrolladas permitan a estas primeras escalar posiciones en la economía mundial, sea a través de la adquisición de grandes empresas como con la entrada en sectores productivos hasta ahora dominados por los países industrializados