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The Efficiency of Private E-Money-Like Systems: The U.S. Experience with State Bank Notes

Staff Working Paper 2014-15 Warren E. Weber
In the United States prior to 1863 each bank issued its own distinct notes. E-money shares many of the characteristics of these bank notes. This paper describes some lessons relevant to e-money from the U.S. experience with state bank notes.

Electronic Money and Payments: Recent Developments and Issues

Staff Discussion Paper 2014-2 Ben Fung, Miguel Molico, Gerald Stuber
The authors review recent developments in retail payments in Canada and elsewhere, with a focus on e-money products, and assess their potential public policy implications.

Bond Risk Premia and Gaussian Term Structure Models

Staff Working Paper 2014-13 Bruno Feunou, Jean-Sébastien Fontaine
Cochrane and Piazzesi (2005) show that (i) lagged forward rates improve the predictability of annual bond returns, adding to current forward rates, and that (ii) a Markovian model for monthly forward rates cannot generate the pattern of predictability in annual returns.
Content Type(s): Staff research, Staff working papers Topic(s): Asset pricing, Interest rates JEL Code(s): E, E4, E43, E47, G, G1, G12

Do Sunspots Matter? Evidence from an Experimental Study of Bank Runs

Staff Working Paper 2014-12 Jasmina Arifovic, Janet Hua Jiang
A "sunspot" is a variable that has no direct impact on the economy’s fundamental condition, such as preferences, endowments or technologies, but may nonetheless affect economic outcomes through the expectations channel as a coordination device. This paper investigates how people react to sunspots in the context of a bank-run game in a controlled laboratory environment.
Content Type(s): Staff research, Staff working papers Topic(s): Financial markets, Financial stability JEL Code(s): C, C9, C91, C92, D, D8, D80, E, E5, E58, G, G2, G20

Do High-Frequency Financial Data Help Forecast Oil Prices? The MIDAS Touch at Work

Staff Working Paper 2014-11 Christiane Baumeister, Pierre Guérin, Lutz Kilian
The substantial variation in the real price of oil since 2003 has renewed interest in the question of how to forecast monthly and quarterly oil prices. There also has been increased interest in the link between financial markets and oil markets, including the question of whether financial market information helps forecast the real price of oil in physical markets.

Macroeconomic Experiences and Risk Taking of Euro Area Households

Staff Working Paper 2014-10 Miguel Ampudia, Michael Ehrmann
This paper studies to what extent the experiences of households shape their willingness to take financial risks. It follows the methodology of Malmendier and Nagel (2011) and applies it to a novel data set on household finances covering euro area households.
Content Type(s): Staff research, Staff working papers Topic(s): Sectoral balance sheet JEL Code(s): D, D0, D03, D1, D14, D8, D83, G, G1, G11

Labor Market Participation, Unemployment and Monetary Policy

Staff Working Paper 2014-9 Alessia Campolmi, Stefano Gnocchi
We incorporate a participation decision in a standard New Keynesian model with matching frictions and show that treating the labor force as constant leads to incorrect evaluation of alternative policies.

Rollover Risk and the Maturity Transformation Function of Banks

Staff Working Paper 2014-8 Teodora Paligorova, João Santos
This paper shows that banks that rely heavily on short-term funding engage less in maturity transformation in an attempt to decrease their exposure to rollover risk. These banks shorten both the maturity of their portfolio of loans as well as the maturity of newly issued loans. We find that the loan yield curve becomes steeper with banks’ increasing use of short-term funding.
Content Type(s): Staff research, Staff working papers Topic(s): Financial stability JEL Code(s): G, G2, G21
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