We investigate the long-term relationship between conflict-related migration and individual socioeconomic inequality. Looking at the post-conflict environment of Bosnia and Herzegovina (BiH), a former Yugoslav state most heavily impacted by the conflicts of the early 1990s, the paper focuses on differences in educational performance and income between four groups: migrants, internally displaced persons, former external migrants, and those who did not move. The analysis leverages a municipality-representative survey (n≈6,000) that captured self-reported education and income outcomes as well as migration histories. We find that individuals with greater exposure to conflict had systematically worse educational performance and lower earnings two decades after the war. Former external migrants now living in BiH have better educational and economic outcomes than those who did not migrate, but these advantages are smaller for individuals who were forced to move. We recommend that policies intended to address migration-related discrepancies should be targeted on the basis of individual and family experiences caused by conflict.

We study how financing non-traditional local activities, conceived here as a proxy for activity diversification, is associated with economic growth. We use municipality-level data from Brazil, a country with large geographical, social, and economic disparities observed across its more than 5500 municipalities. We find that finance to non-traditional local activities associates with higher municipal economic growth, suggesting a positive externality between the non-traditional and traditional sectors. Using large natural disasters in Brazil as sources of unexpected negative events, we find that this association between financing non-traditional local activities and economic growth becomes negative in times of distress. We find that traditional local sectors are more affected than non-traditional sectors following a natural disaster. Precisely because of the non-traditional sector’s dependence on the traditional sector, our results suggest that municipalities should restrengthen their traditional activities during adverse conditions.

Using daily data for 34 emerging markets in the period 1994–2016, we find robust evidence that higher export commodity prices are associated with lower sovereign default risk, as measured by lower EMBI spreads. The economic effect is especially pronounced for heavy commodity exporters. Examining the drivers, we find that, first, commodity dependence is higher for countries that export large volumes of commodities, whereas other portfolio characteristics like volatility or concentration are less important. Second, commodity-sovereign risk dependence increases in times of recessions and expansionary U.S. monetary policy. Third, the importance of raw material prices for sovereign financing can likely be mitigated if a country improves institutions and tax systems, attracts FDI inflows, invests in manufacturing, machinery and infrastructure, builds up reserve assets and opens capital and trade accounts. Fourth, the country’s government indebtedness or amount of received development assistance appear to be only of secondary importance for commodity dependence.

Does finance facilitate efficient allocation of resources? Our aim in this paper is to find out whether increases in private and public indebtedness affect capital misallocation, which is measured as the dispersion in the return to capital across firms in different industries. For this, we use a novel dataset containing industrylevel data for 18 European countries and control for different macroeconomic indicators as potential determinants of capital misallocation. We exploit the within-country variation across industries in such indicators as external finance dependence, technological intensity, credit constraints and competitive structure, and find that private debt accumulation disproportionately increases capital misallocation in industries with higher financial dependence, higher R&D intensity, a larger share of credit-constrained firms and a lower level of competition. On the other hand, we fail to find any significant and robust effect of public debt on capital misallocation within our country-sector pairs. We believe the distortionary effects of private debt found in our analysis needs a deeper theoretical investigation.

Using daily data for 34 emerging markets in the period 1994-2016, we find robust evidence that higher export commodity prices are associated with higher sovereign bond returns (indicating lower sovereign risk). The economic effect is especially pronounced for heavy commodity exporters. Examining the drivers, we find, first, that commodity-dependence is higher for countries that export large volumes of volatile commodities and that the effect increases in times of recessions, high inflation, and expansionary U.S. monetary policy. Second, the importance of raw material prices for sovereign financing can likely be mitigated if a country improves institutions and tax systems, attracts FDI inflows, invests in manufacturing, machinery and infrastructure, builds up reserve assets and opens capital and trade accounts. Third, the concentration of commodities within a country’s portfolio, its government indebtedness or amount of received development assistance appear to be only of secondary importance for commodity-dependence.

Most countries in the European Union (EU) delay the transposition of European Commission (EC) directives, which aim at reforming banking supervision, resolution, and deposit insurance. We compile a systematic overview of these delays to investigate if they result from strategic considerations of governments conditional on the state of their financial, regulatory, and political systems. Transposition delays pertaining to the three Banking Union directives differ considerably across the 28 EU members. Bivariate regression analyses suggest that existing national bank regulation and supervision drive delays the most. Political factors are less relevant. These results are qualitatively insensitive to alternative estimation methods and lag structures. Multivariate analyses highlight that well-stocked deposit insurance schemes speed-up the implementation of capital requirements, banking systems with many banks are slower in implementing new bank rescue and resolution rules, and countries with a more intensive sovereign-bank nexus delay the harmonization of EU deposit insurance more.

Politicians frequently voice that European bond issuers would benefit from the presence of a Europe-based rating agency. We take Fitch as a prototype for such an agency. With its ownership structure and a headquarter in London, Fitch is more European than Moody’s and S&P; during the Eurozone sovereign debt crisis, it also issued more favorable ratings. Fitch’s rating actions, however, were largely ignored by the bond market. Our results thus cast doubt on the benefits of a European credit rating agency.

Die Europäische Kommission hat weitreichende Reformen zur Regulierung und Überwachung des europäischen Bankensektors beschlossen, um die Stabilität europäischer Banken zu gewährleisten. In den meisten Mitgliedsländern verzögert sich allerdings die Umsetzung der zugrunde liegenden Richtlinien der Europäischen Kommission. Dieser Beitrag geht den Gründen für diese Verzögerung nach. Es zeigt sich, dass insbesondere bereits existierende Regulierungen und institutionelle Rahmenbedingungen das Tempo der Umsetzung entscheidend bestimmen. Entgegen populären Meinungsäußerungen sind die Struktur der Bankensektoren in den Mitgliedstaaten und politische Faktoren hingegen von nachrangiger Bedeutung.

To safeguard financial stability and harmonise regulation, the European Commission substantially reformed banking supervision, resolution, and deposit insurance via EU directives. But most countries delay the transposition of these directives. We ask if transposition delays result from strategic considerations of governments conditional on the state of their financial, regulatory, and political systems? Supervisors might try to protect national banking systems and local politicians maybe reluctant to surrender national sovereignty to deal with failed banks. Alternatively, intricate financial regulation might require more implementation time in large and complex financial and political systems. We therefore collect data on the transposition delays of the three Banking Union directives and investigate observed delay variation across member states. Our correlation analyses suggest that existing regulatory and institutional frameworks, rather than banking market structure or political factors, matter for transposition delays.

We analyse whether different levels of country ties to Europe among the rating agencies Moody’s, S&P, and Fitch affect the assignment of sovereign credit ratings, using the Eurozone sovereign debt crisis of 2009-2012 as a natural laboratory. We find that Fitch, the rating agency among the “Big Three” with significantly stronger ties to Europe compared to its two more US-tied peers, assigned on average more favourable ratings to Eurozone issuers during the crisis. However, Fitch’s better ratings for Eurozone issuers seem to be neglected by investors as they rather follow the rating actions of Moody’s and S&P. Our results thus doubt the often proposed need for an independent European credit rating agency.