From boundary to bulk in logarithmic CFT

The analogue of the charge-conjugation modular invariant for rational logarithmic conformal field theories is constructed. This is done by reconstructing the bulk spectrum from a simple boundary condition (the analogue of the Cardy `identity brane'). We apply the general method to the c_1,p triplet models and reproduce the previously known bulk theory for p=2 at c=-2. For general p we verify that the resulting partition functions are modular invariant. We also construct the complete set of 2p boundary states, and confirm that the identity brane from which we started indeed exists. As a by-product we obtain a logarithmic version of the Verlinde formula for the c_1,p triplet models.Comment: 35 pages, 2 figures; v2: minor corrections, version to appear in J.Phys.

Rigidity and defect actions in Landau-Ginzburg models

Studying two-dimensional field theories in the presence of defect lines naturally gives rise to monoidal categories: their objects are the different (topological) defect conditions, their morphisms are junction fields, and their tensor product describes the fusion of defects. These categories should be equipped with a duality operation corresponding to reversing the orientation of the defect line, providing a rigid and pivotal structure. We make this structure explicit in topological Landau-Ginzburg models with potential x^d, where defects are described by matrix factorisations of x^d-y^d. The duality allows to compute an action of defects on bulk fields, which we compare to the corresponding N=2 conformal field theories. We find that the two actions differ by phases.Comment: 53 pages; v2: clarified exposition of pivotal structures, corrected proof of theorem 2.13, added remark 3.9; version to appear in CM

Greece: Emergency Liquidity Assistance

The Global Financial Crisis of 2007-09 triggered a deep recession in Greece, leading investors to withdraw one third of Greek bank deposits between 2008 and 2011. As banks’ nonperforming assets rose and rating agencies downgraded Greek sovereign debt, Greek banks’ capital fell below levels required for Eurosystem refinancing operations. In response, the Bank of Greece (BOG) provided Emergency Liquidity Assistance (ELA) to all Greek banks. ELA was a revolving credit line open to solvent institutions at a premium rate, so long as that support did not interfere with the Eurosystem’s monetary policy. European Central Bank (ECB) rules required the BOG to bear all credit risk for ELA. The Greek case was the first ELA to be administered to an entire financial system. From August 2011 to February 2019, the BOG provided ELA at a 100-150 basis-point premium over the ECB’s refinancing rate. ELA outstanding peaked at EUR 124 billion (USD 162 billion) in May 2012, and again at EUR 90 billion in May 2015. In total, banks paid EUR 4.5 billion in premia above Eurosystem interest rates. ELA ended when Greek banks were once again accepted as counterparties in Eurosystem refinancing operations. A small body of research agrees that ELA significantly improved the liquidity of Greek banks

Venezuela: Reserve Requirements, GFC

Leading up to the Global Financial Crisis (GFC), the Banco Central de Venezuela (BCV) sought to tamp down inflation by raising its interest rate target and by raising the marginal reserve requirement for banks, which it had introduced in 2006. By late 2008, the GFC began to hit Venezuelan banks and the country’s public oil producer (PDVSA). Widespread deposit withdrawals squeezed banks and pushed the interbank lending rate to 28%. The BCV responded in December 2008 by lowering the marginal reserve requirement, applicable to deposits above 90 billion bolívars (USD 4.2 million), from 30% to 27% of deposits. It held the minimum cash reserve requirement at 17%. The global recession also cut into the revenue of PDVSA, the country’s biggest exporter. To free up bank liquidity for the purchase of PDVSA bonds and stimulate the economy, the BCV cut the marginal requirement three times between June and October 2010, setting it equal to the minimum requirement of 17%. The first cut in the marginal reserve requirement, from 30% to 27%, released VEF 6 billion (USD 2.8 billion) of liquidity into the financial system

On the crossing relation in the presence of defects

The OPE of local operators in the presence of defect lines is considered both in the rational CFT and the $c>25$ Virasoro (Liouville) theory. The duality transformation of the 4-point function with inserted defect operators is explicitly computed. The two channels of the correlator reproduce the expectation values of the Wilson and 't Hooft operators, recently discussed in Liouville theory in relation to the AGT conjecture.Comment: TEX file with harvmac; v3: JHEP versio

Thailand: Financial Institutions Development Fund Liquidity Support

International investors launched three speculative attacks on the Thai baht in 1996 and 1997 following one high-profile banking failure, constant departures from the Bank of Thailand (BOT), and slumping returns on stocks and real estate. Though the BOT succeeded in the baht’s defense, the BOT’s depleted reserves were unable to fend off domestic troubles that emerged in early 1997. The speculative attacks increased the cost of foreign-denominated debt—which accounted for 18% of all bank lending—and forced up interbank lending yields. The decade-long boom in foreign capital inflows had generally overvalued assets, and banks found themselves in need of outside financing to meet short-term obligations. The Financial Institutions Development Fund (FIDF), created in 1985 by the BOT to support troubled institutions, quietly provided more than THB 400 billion (USD 17 billion) to nonbank finance companies between March 1997 and July 1997. Ultimately, this support did not contain the problem, and by August the BOT had temporarily suspended 58 finance companies. Crisis support ended in January 1998, after the BOT permanently closed 56 of the 58 suspended finance companies and converted FIDF loans to four commercial banks into equity. The liquidity support to finance companies peaked at more than THB 434 billion outstanding in August 1997. The FIDF lost at least THB 244 billion from the liquidity support to finance companies and an unknown amount from the support of commercial banks. That burden, about 15% of GDP, ultimately fell to the BOT and FIDF, which expects to repay FIDF bonds by 2030

Height variables in the Abelian sandpile model: scaling fields and correlations

We compute the lattice 1-site probabilities, on the upper half-plane, of the four height variables in the two-dimensional Abelian sandpile model. We find their exact scaling form when the insertion point is far from the boundary, and when the boundary is either open or closed. Comparing with the predictions of a logarithmic conformal theory with central charge c=-2, we find a full compatibility with the following field assignments: the heights 2, 3 and 4 behave like (an unusual realization of) the logarithmic partner of a primary field with scaling dimension 2, the primary field itself being associated with the height 1 variable. Finite size corrections are also computed and successfully compared with numerical simulations. Relying on these field assignments, we formulate a conjecture for the scaling form of the lattice 2-point correlations of the height variables on the plane, which remain as yet unknown. The way conformal invariance is realized in this system points to a local field theory with c=-2 which is different from the triplet theory.Comment: 68 pages, 17 figures; v2: published version (minor corrections, one comment added

Canada: Bankers’ Acceptance Purchase Facility

Bankers’ acceptances (BAs) are a form of investment security guaranteed by banks to fund loans to businesses against their credit lines. In Canada, BAs underpin the Canadian Dollar Offered Rate (CDOR), the main benchmark used to calculate floating interest rates in Canada’s derivatives market. In 2018, BAs formed the largest segment of money market securities traded in the secondary market at around CAD 35 billion (USD 26 billion) per week. When asset managers and the country’s public pension providers began shedding BAs amid the COVID-19 pandemic in early 2020, CDOR spiked, and the effects threatened to ripple throughout the Canadian financial system. On March 13, 2020, the Bank of Canada (BoC) established the Bankers’ Acceptance Purchase Facility (BAPF). The BAPF conducted multi-rate reverse auctions with Canadian primary dealers for highly rated BAs of remaining maturities up to 76 days. In its first two operations, dealers sold the BoC the total offered amounts of CAD 15 billion and CAD 20 billion, and the BA market stabilized. The BoC bought another CAD 12 billion of BAs in four operations in April. It continued to offer to buy CAD 10 billion in weekly, then biweekly reverse auctions until October, with no further bids from banks

Jamaica: Reserve Requirements, GFC

In October 2008, the Global Financial Crisis (GFC) and liquidity shortages rocked American and European markets, causing investors to exit liquid Jamaican-dollar assets. The Bank of Jamaica (BOJ) feared a “disorderly depreciation” in the Jamaican-dollar (JMD) exchange rate to the US dollar (BOJ 2009, 44). In response, the BOJ raised required reserve ratios for cash and other liquid assets, the first increases since 2002. The BOJ raised reserve ratios three times—in December 2008, January 2009, and February 2009—because the central bank could not change its requirements by more than 200 basis points per month. The BOJ raised the requirement for domestic currency assets to restrict the supply of Jamaican dollars available to trade for foreign currencies. Further, the BOJ said that raising reserve requirements on the domestic currency would also help to ensure that banks had cash on hand when depositors withdrew their funds. The cash reserve ratio increase absorbed JMD 4.7 billion (USD 62.6 million) in the fourth quarter of 2008 and JMD 7.2 billion (USD 96 million) in the first quarter of 2009, according to the BOJ

Canada: Government Bond Purchase Program

In Canada, the shock of the COVID-19 crisis drove up bid-ask spreads on Government of Canada (GoC) bonds. The Bank of Canada (BoC) announced the Government Bond Purchase Program (GBPP) to support the functioning of its government bond market, support other market liquidity tools, and replace the BoC\u27s long-standing fiscal agent activities. The GBPP conducted multi-rate reverse auctions with primary dealers to purchase GoC bonds in the secondary market. The GBPP purchased bonds across the yield curve but concentrated on two- and five-year tenors. In June 2020, with CAD 64.7 billion (USD 48 billion) outstanding, the BoC announced that the program\u27s purpose had shifted to quantitative easing (QE). The GBPP continued well after the GoC market calmed and, in October 2021, the BoC ended QE, leaving the program to conduct regular liquidity management