Mr.Christian Schmieder

Ms.Anna Ilyina

Mr.Eugenio Cerutti

Ms.Yuliya Makarova

This paper presents a stylized analysis of the effects of ring-fencing (i.e., different restrictions on cross-border transfers of excess profits and/or capital between a parent bank and its subsidiaries located in different jurisdictions) on cross-border banks. Using a sample of 25 large European banking groups with subsidiaries in Central, Eastern and Southern Europe (CESE), we analyze the impact of a CESE credit shock on the capital buffers needed by the sample banking groups under different forms of ring-fencing. Our simulations show that under stricter forms of ring-fencing, sample banking groups have substantially larger needs for capital buffers at the parent and/or subsidiary level than under less strict (or in the absence of any) ring-fencing.

Bankers Without Borders? Implications of Ring-Fencing for European Cross-Border Banks

Mr.Haonan Qu

Mr.Christian H Ebeke

Allan Dizioli

Mr.Ruben V Atoyan

Lone Engbo Christiansen

Mr.Nadeem Ilahi

Mr.Gil Mehrez

Ms.Faezeh Raei

Ms.Alaina P Rhee

Ms.Daria V Zakharova

This paper analyses the impact of large and persistent emigration from Eastern European countries over the past 25 years on these countries’ growth and income convergence to advanced Europe. While emigration has likely benefited migrants themselves, the receiving countries and the EU as a whole, its impact on sending countries’ economies has been largely negative. The analysis suggests that labor outflows, particularly of skilled workers, lowered productivity growth, pushed up wages, and slowed growth and income convergence. At the same time, while remittance inflows supported financial deepening, consumption and investment in some countries, they also reduced incentives to work and led to exchange rate appreciations, eroding competiveness. The departure of the young also added to the fiscal pressures of already aging populations in Eastern Europe. The paper concludes with policy recommendations for sending countries to mitigate the negative impact of emigration on their economies, and the EU-wide initiatives that could support these efforts.

Emigration and Its Economic Impact on Eastern Europe

Ms.Inci Ötker

Aditya Narain

Jay Surti

DISCLAIMER: This Staff Discussion Note represents the views of the authors and does not necessarily represent IMF views or IMF policy. The views expressed herein should be attributed to the authors and not to the IMF, its Executive Board, or its management. Staff Discussion Notes are published to elicit comments and to further debate.

Impossible to Ignore and Difficult to Resolve

The Too-Important-to-Fail Conundrum

Ms.Anna Ilyina

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