Recommended articles: Financial Risk Management

1. Global financial cycles and risk premiums. Asset markets in advanced economies have become more integrated than ever before in the history of modern finance. This is especially true for global equities starting in the 1990s. This column argues that this increase in synchronisation is primarily driven by fluctuations in risk appetite rather than in risk-free rates, or in dividends. US monetary policy plays a major role in explaining such fluctuations, and this transmission channel affects economies with both fixed and floating exchange rates, although the effects are more muted in floating rate regimes (VOX).
2. The credit default swap market: what a difference a decade makes (The Big Picture).
3. Basel Committee issues progress report on banks' implementation of the Principles for effective risk data aggregation and reporting (BIS).
4. High stakes: How investors can manage risk in the new infrastructure environment. Technology is disrupting construction on multiple fronts. What are the consequences for infrastructure-investment managers? (McKinsey).
5. On the direct and indirect real effects of credit supply shocks. Propagation through buyer-seller interactions may amplify the aggregate impact of bank lending shocks on real activity. This column presents insights from estimating the direct and indirect effects of exogenous credit supply shocks in Spain between 2002 and 2013. Both direct and indirect effects of bank credit shocks had sizable effects on investment and output throughout the period. Trade credit extended by suppliers and price adjustments both appear to explain downstream propagation of financial shocks (VOX).
6. The Future of Finance (The Big Picture).