Nobel, balance sheet
49188002
Mass balance of the Antarctic Ice Sheet from 1992 to 2017
The Antarctic Ice Sheet is an important indicator of climate change and driver of sea level rise. Here we combine satellite observations of its changing volume, flow and gravitational attraction with modelling of its surface mass balance to show that it lost 2,720 1,390 billion tonnes of ice between 1992 and 2017, which corresponds to an increase in mean sea level of 7.6 3.9 millimetres (errors are one standard deviation) Over this period, ocean driven melting has caused rates of ice loss from West Antarctica to increase from 53 29 billion to 159 26 billion tonnes per year; ice shelf collapse has increased the rate of ice loss from the Antarctic Peninsula from 7 13 billion to 33 16 billion tonnes per year. We find large variations in and among model estimates of surface mass balance and glacial isostatic adjustment for East Antarctica, with its average rate of mass gain over the period 1992 2017 (5 46 billion tonnes per year) being the least certain.
Nature
Andrew Shepherd Erik R Ivins E Rignot Ben Smith Michiel van den Broeke Isabella Velicogna Pippa L Whitehouse Kate H Briggs Ian R Joughin Gerhard Krinner Sophie M J Nowicki Tony Payne Theodore A Scambos Nicole Schlegel A Geruo Cecile Agosta Andreas P Ahlstrom G S Babonis Valentina R Barletta A Blazquez Jennifer A Bonin Beata M Csatho Richard I Cullather Denis Felikson Xavier Fettweis Rene Forsberg Hubert Gallee Alex S Gardner Lin Gilbert Andreas Groh Brian C Gunter Edward Hanna Christoph Harig Veit Helm Alexander Horvath Martin Horwath Shfaqat Abbas Khan Kristian K Kjeldsen Hannes Konrad Peter L Langen Benoit S Lecavalier Bryant D Loomis Scott B Luthcke Malcolm McMillan Daniele Melini Sebastian H Mernild Yara Mohajerani Philip Moore Jeremie Mouginot Gorka Moyano Alan S Muir Thomas Nagler Grace A Nield Johan Nilsson Brice P Y Noel Ines Otosaka Mark E Pattle William Richard Peltier Nadege Pie Roelof Rietbroek Helmut Rott Louise Sandberg-Sorensen Ingo Sasgen Himanshu Save Bernd Scheuchl Ernst J O Schrama Ludwig Schroder Ki-Weon Seo Sebastian Bjerregaard Simonsen Thomas Slater Giorgio Spada Tyler Clark Sutterley Matthieu Jean Talpe L S Tarasov Willem Jan van de Berg W Wal Melchior van Wessem Bramha Dutt Vishwakarma David N Wiese Bert Wouters
170002473
Central Bank Digital Currencies Design Principles and Balance Sheet Implications
This paper sets out three models of central bank digital currency (CBDC) that differ in the sectors that have access to CBDC. It studies sectoral balance sheet dynamics at the point of an initial CBDC introduction, and of an attempted large scale run out of bank deposits into CBDC. We find that if the introduction of CBDC follows a set of core principles, bank funding is not necessarily reduced, credit and liquidity provision to the private sector need not contract, and the risk of a system wide run from bank deposits to CBDC is addressed. The core principles are: (i) CBDC pays an adjustable interest rate. (ii) CBDC and reserves are distinct, and not convertible into each other. (iii) No guaranteed, on demand convertibility of bank deposits into CBDC at commercial banks (and therefore by implication at the central bank) (iv) The central bank issues CBDC only against eligible securities (principally government securities) The final two principles imply that households and firms can freely trade bank deposits against CBDC in a private market, and that the private market can freely obtain additional CBDC from the central bank, at the posted CBDC interest rate and against eligible securities.
Michael Kumhof Clare Noone
158289850
China's energy consumption in the building sector: A Statistical Yearbook Energy Balance Sheet based splitting method
Abstract China's energy consumption in the building sector (BEC) is not counted as a separate type of energy consumption, but divided and mixed in other sectors in China's statistical system. This led to the lack of historical data on China's BEC. Moreover, previous researches' shortages such as unsystematic research on BEC, various estimation methods with complex calculation process, and difficulties in data acquisition resulted in "heterogeneous" of current BEC in China. Aiming to these deficiencies, this study proposes a set of China building energy consumption calculation method (CBECM) by splitting out the building related energy consumption mixed in other sectors in the composition of China Statistical Yearbook Energy Balance Sheet. Then, China's BEC from 2000 to 2014 are estimated using CBECM and compared with other studies. Results show that, from 2000 to 2014, China's BEC increased 1.7 times, rising from 301 to 814 million tons of standard coal consumed, with the BEC percentage of total energy consumption stayed relatively stable between 17.7% and 20.3% By comparison, we find that our results are reliable and the CBECM has the following advantages over other methods: data source is authoritative, calculation process is concise, and it is easy to obtain time series data on BEC etc. The CBECM is particularly suitable for the provincial government to calculate the local BEC, even in the circumstance with statistical yearbook available only.
T Huo Hong Ren Xiaoling Zhang Weiguang Cai Wei Feng Nan Zhou Xia Wang
158598836
A Skeptical View of the Impact of the Fed's Balance Sheet
We review the recent U.S. monetary policy experience with large scale asset purchases (LSAPs) and draw lessons for monetary policy going forward. A rough consensus from previous studies is that LSAP purchases reduced yields on 10 year Treasuries by about 100 basis points. We argue that the consensus overstates the effect of LSAPs on 10 year yields. We use a larger than usual population of possible events and exploit interpretations provided by the business press. We find that Fed actions and announcements were not a dominant determinant of 10 year yields and that whatever the initial impact of some Fed actions or announcements, the effects tended not to persist. In addition, the announcements and implementation of the balance sheet reduction do not seem to have affected rates much. Going forward, we expect the Federal Reserve's balance sheet to stay large. This calls for careful consideration of the maturity distribution of assets on the Fed's balance sheet. Our conclusion is that the most important and reliable instrument of monetary policy is the short term interest rate, and we discuss the implications of this finding for Fed policy going forward.
David Greenlaw James D Hamilton Ethan S Harris Kenneth D West
159104246
A large central bank balance sheet? Floor vs corridor systems in a New Keynesian environment
The quantitative easing (QE) policies implemented in recent years by central banks have had a profound impact on the working of money markets, giving rise to large excess reserves and pushing down key interbank rates against their floor the interest rate on reserves. With macroeconomic fundamentals improving, central banks now face the dilemma as to whether to maintain this large balance sheet/floor system, or else to reduce their balance sheet size towards pre crisis trends and operate traditional corridor systems. We address this issue using a New Keynesian model featuring heterogeneous banks that trade funds in an interbank market characterized by matching frictions. In this environment, balance sheet expansions push market rates towards their floor by slackening the interbank market. A large balance sheet regime is found to deliver ampler "policy space" by widening the steady state distance between the interest on reserves and its effective lower bound (ELB) Nonetheless, a lean balance sheet regime that resorts to temporary but prompt QE in response to recessions severe enough for the ELB to bind achieves similar stabilization and welfare outcomes as a large balance sheet regime in which interest rate policy is the primary adjustment margin thanks to the larger policy space.
Oscar J Arce Galo Nuno Dominik Thaler Carlos Thomas
153497117
Balance Sheet Conservatism and Debt Contracting
We study the dual role of borrowers' balance sheet conservatism (i.e. conservatism in asset values) in debt contract design. Conservative asset values reduce lenders' uncertainty regarding asset valuation and mitigate debtholder shareholder conflicts. However, as asset valuation approaches its lower bound estimates, it constrains the borrowers' future ability to take write downs in response to bad news. Consistent with these two effects, we find that high balance sheet conservatism is associated with lower interest and less restrictive covenants for bank loans. Further, lenders appear to recognize that future conservatism is constrained when balance sheet conservatism is high. Our results highlight the importance of considering time series dependencies of accounting policies in contract design.
Jayanthi Sunder Shyam Sunder Jingjing Zhang
11962042
Central Bank Balance Sheet Policies Without Rational Expectations
We study the effects of central bank balance sheet policies namely, quantitative easing and foreign exchange interventions in a model where people form expectations through the level k thinking process, which is consistent with experimental evidence on the behavior of people in strategic environments. We emphasize two main theoretical results. First, under a broad set of conditions, central bank interventions are effective under level k thinking, while they are neutral in the rational expectations equilibrium. Second, forecast errors about future endogenous variables are predictable by balance sheet interventions. We confirm these predictions using data on mortgage purchases by US government sponsored enterprises.
Luigi Iovino Dmitriy Sergeyev
49235206
Fiscal Implications of the Federal Reserve's Balance Sheet Normalization
This Note summarizes analysis conducted in our recent FEDS working paper that seeks to understand the fiscal implications of the Federal Reserve's balance sheet normalization program.
Michele Cavallo Marco Del Negro W Scott Frame Jamie Grasing Benjamin A Malin Carlo Rosa
158117322
Shadow Funding Costs: Measuring the Cost of Balance Sheet Constraints
Recent theory suggests that balance sheet frictions and constraints faced by financial intermediaries can have major asset pricing implications. We propose a new measure of the impact of these constraints on intermediary funding costs that is based on the implied cost of renting intermediary balance sheet space. On average, balance sheet constraints add 81 basis points to intermediary funding costs, but the impact often exceeds 200 basis points during a crisis. We find that these balance sheet costs have real effects on intermediary investment decisions and asset holdings. Increases in balance sheet costs are associated with short term increases in the use of derivatives, but longer term declines in risk taking by financial institutions. Balance sheet costs introduce a wedge between on and off balance sheet investments which may help resolve a number of asset pricing puzzles.
Matthias Fleckenstein Francis A Longstaff
168651046
Towards Monitoring and Managing Subnational Liabilities in China: Lessons from the Balance Sheet for County K
The monitoring and managing of subnational liabilities is taking on considerable importance in China. Considerable efforts have been underway to strengthen national institutions and public financial management processes and procedures this includes the move towards a GSFM2001/14 budget system that ensures consistency of fiscal information with national accounts. In essence, this requires the development of balance sheets at different levels of government to generate full information on general government operations. We use a detailed survey from an advanced county, K, in Jiangsu Province, that has started developing a local balance sheet. This shows considerable gaps and lacunae that need to be addressed to be certain that the full magnitude of liabilities is being captured, and that appropriate measures to address these are formulated at the local level. Otherwise there is a danger that liabilities will continue to be generated in the expectation that the central government will eventually provide, despite the recent strengthening of the budget law in this regard. Without own source revenues, no bailout sanctions are not credible, especially if the information base is incomplete.
Ehtisham Ahmad Xiaorong Zhang