You can read it here, with the usual striking photo.
Author: Philip Lane
The same BIS Quarterly Review also carries an analysis of the holdings of foreign banks (with a geographical breakdown) in the troubled periphery of the euro area and shows the allocation between claims on the public sector, banks and the non-bank private sector: you can read it here.
As has been pointed out repeatedly on this blog, the claims on Ireland have to be treated with some caution in view of the role played by IFSC-located entities. In its coverage of this new article, the New York Times highlights the probable role of Hypo Real Estate’s subsidiary in Dublin (the former Depfa bank) in contributing to the high claims of Germany on the Irish non-public sector.
The new issue of the BIS Quarterly Review carries some interesting empirical work on debt reduction after crises. The paper is here and the summary is:
Financial crises tend to be followed by a protracted period of debt reduction in the nonfinancial private sector. We find that a period of debt reduction followed 17 out of 20 systemic banking crises that were preceded by surges in credit. Debt/GDP ratios fell by an average of 38 percentage points, returning to approximately the levels seen before the increase. If history is any guide, we should expect to see a much more significant reduction in private sector debt, particularly of households, than has so far taken place after the recent crisis. The costs of this process in forgone output are difficult to pin down, but there are reasons to believe that they need not be high provided that the banking sector problems that led to the crisis are fixed.
The IMF has released three major studies on the fiscal situation in advanced economies.
The summary is here, while the papers are available at:
In this Jackson Hole paper, Carmen Reinhart and Vincent Reinhart find that the negative impact of severe financial crises on macroeconomic performance is long lasting, with real house prices remaining below the previous peak a decade after the crash, unemployment remaining at an elevated level and a cumulatively-large decline in GDP growth.