Global Liquidity - Issues for Surveillance

Download or read book Global Liquidity - Issues for Surveillance written by International Monetary Fund and published by International Monetary Fund. This book was released on 2014-12-03 with total page 63 pages. Available in PDF, EPUB and Kindle. Book excerpt: The paper starts by presenting evidence of commonality in global financial conditions. This commonality is then related to specific drivers of global financial conditions through a range of transmission channels, including cross-border banking and portfolio flows. Empirical analysis shows a range of price and quantity factors, including measures of risk, bank leverage, and interest rates in financial centers, to drive in part these flows. Country specific policies, including exchange rate and prudential frameworks, are shown to affect the transmission of global conditions. Much remains unknown though, including how evolving structures of global funding, changing institutions, and ongoing financial innovations affect the mechanics of liquidity creation, the channels of liquidity transmission, and potential risks going forward.