QE and the bank lending channel in the United Kingdom

We test whether quantitative easing (QE), in addition to boosting aggregate demand and inflation via portfolio rebalancing channels, operated through a bank lending channel (BLC) in the UK. Using Bank of England data together with an instrumental variables approach, we find no evidence of a traditional BLC associated with QE. We show, in a simple framework, that the traditional BLC is diminished if the bank receives ‘flighty’ deposits (deposits that are likely to quickly leave the bank). We show that QE gave rise to such flighty deposits which may explain why we find no evidence of a BLC

QE and the Bank Lending Channel in the United Kingdom in the United Kingdom

We test whether quantitative easing (QE), in addition to boosting aggregate demand and inflation via portfolio rebalancing channels, operated through a bank lending channel (BLC) in the UK. Using Bank of England data together with an instrumental variables approach, we find no evidence of a traditional BLC associated with QE. We show, in a simple framework, that the traditional BLC is diminished if the bank receives 'flighty' deposits (deposits that are likely to quickly leave the bank). We show that QE gave rise to such flighty deposits which may explain why we nd no evidence of a BLC

Influence of laser polishing on the material properties of aluminium L-PBF components

In this study, the influence of laser polishing on the microstructural and mechanical properties of additively manufactured aluminium AlSi10Mg Laser Powder Bed Fusion (L-PBF) parts is analysed. The investigation is carried out on a 5-axis laser cell equipped with 1D Scanner optics driven by a solid-state disc laser at a wavelength of 1030 nm. Laser polishing is performed with pulsed or continuous laser radiation on samples in the initial L-PBF state or after stress relief treatment in a furnace. The metallurgical investigation of the remelting zone with a depth of 101–237 µm revealed an unchanged and homogeneous chemical composition, with a coarsened α-phase and a changed grain structure. The hardness within the remelting zone is reduced to 102–104 HV 0.1 compared to 146 HV 0.1 at the L-PBF initial state. Below the remelting zone, within the heat affected zone, a reduced microhardness, which can reach a thickness up to 1.5 mm, occurs. Laser polishing results in a reduction in residual stresses and resulting distortions compared to the L-PBF initial state. Nevertheless, the re-solidification shrinkage of the polished surface layer introduces additional tensions, resulting in sample distortions well above ones remaining after a stress relieve heat treatment of the initial state. The mechanical properties, analysed on laser polished flat tensile specimens, revealed an increase in the ultimate elongation from 4.5% to 5.4–10.7% and a reduction in the tensile strength from 346 N/mm2 to 247–271 N/mm2 through laser polishing. Hence, the strength resulting from this is comparable to the initial L-PBF specimens after stress relieve heat treatment

How do different models of foreign exchange settlement influence the risks and benefits of global liquidity management?

Large, international banking groups have sought to centralise their cross-currency liquidity management: liquidity shortages in one currency are financed using liquidity surpluses in another currency. The nature of risks to financial stability emerging from global liquidity management depends on how these foreign exchange transactions settle. I analyse these risks in a game of asymmetric information. The main result is that the transition from local to global liquidity management, and better co-ordination in settlement of foreign exchange transactions, have two effects. On the one hand, the likelihood rises that payments are delayed beyond their due date. On the other hand, solvency shocks are less likely to be passed on to other banks. The main assumption is that lending between subsidiaries of the same banking group takes place under symmetric information, while external interbank market loans are extended under asymmetric information. More co-ordinated settlement increases the exposure of the intragroup lender relative to the interbank lender and leads to more informed lending.Liquidity risk; foreign exchange settlement