CEMLA’s Directorate of Financial Stability and the Toronto Centre organized the Course on Climate Risk and Financial Stability. The Meeting was held in digital format on July 18-22, 2022, and was attended by 26 representatives from 22 institutions and associates of CEMLA, representing 19 countries from the Americas, 2 European countries, and 1 Asian country. The event featured sessions on the understanding and management of environmental risk by financial institutions, climate scenario analysis and stress testing, the development of definitions and standards to identify green assets, and the adaptation of macroprudential frameworks to climate change risks. The agenda, available here, included sessions by Clive Briault, Barry Johnston and Jennifer Long from the Toronto Centre.

During the first half of 2022, U.S. employment of Mexican immigrant workers continued to improve, leading to an increase in their wage bill. At the end of the second quarter, the wage bill reached US$303.72 billion annually. The percentage of the wage bill earned by such Mexican immigrant workers that was sent to Mexico as remittances was 16.7% in the first half of 2022.

In July 2021, the population of Hispanic origin in the United States was 62.6 million people, representing 18.9% of the U.S. population. The main population group among Hispanics is of Mexican origin, whose share is 62%. At the end of the first quarter of 2022, the annual wage bill of Hispanic workers reached 1,295,993 million dollars, a figure very close to Mexico's GDP.

The Covid-19 pandemic has had an enormous social impact in Mexico and has also affected the economy of individuals and households. The note documents the strong economic impact of the Covid-19 pandemic on Mexican individuals and households, both remittance recipients and non-recipients. It analyzes the negative impact on jobs and sources of income and how it led to higher health and funeral expenses. In order to cope with the economic impact, a significant segment of individuals and households had to borrow, reduce expenses and, to the extent possible, work more. The impact was greater on remittance recipients because they have less access to social security, as a result of the fact that they are more likely to work in informal activities. In this context, the remittances sent by their relatives contributed to alleviate the economic impact on the individuals and households receiving remittances and to overcome it.

CEMLA is jointly organizing with the Federal Reserve Bank of Dallas a Financial Stability Workshop, to be held in-person in Mexico City between December 12-13, 2022. Victoria Ivashina (Harvard Business School) will participate as keynote speaker. The organizers invite submissions of research papers in different fields of financial stability. The Call for Paper and all related information is available in the following link.

Dr. Peter Karlström, from CEMLA’s Directorate of Financial Stability, presented the paper ”Credit Booms, Macroprudential Policy and Financial Crises” at the 6th International Workshop on “Financial Markets and Nonlinear Dynamics” (FMND) that took place in Paris on June 2-3, 2022. The program featured presentations by both scholars and finance professionals as well as keynote sessions with Professors James Hamilton, Esfandiar Maasoumi, and Barbara Rossi. The workshop was co-organized by Aix-Marseille University and University of Lille.

During the first quarter of 2022, employment in the United States of workers of Mexican origin, both native-born and immigrant, was 17.4 million people, which is equivalent to 83% of the total number of workers insured by the IMSS in Mexico. Likewise, in 2021, the wage bill of workers of Mexican origin in the United States reached 723 billion dollars, an amount equivalent to 55 percentage points of Mexico's GDP.

The CEMLA is pleased to announce the LAJCB Best Article Prize, which will be a yearly award sponsored by the CEMLA and awarded to an author(s) to recognize her or his outstanding scientific publication in the journal.

The Prize will be awarded to one research article and to one policy article, which will receive a compensation of 2500 USD and 1000 USD, respectively. Best articles are mainly determined by usage (number of times articles are downloaded) and citation (highest citation count) metrics.

The LAJCB Best Article Prize in 2020 was/were awarded to:

Carlos León for the paper “Detecting anomalous payments networks: A dimensionality-reduction approach”, Volume 1, Number 1-4, 100001 for the Best Research Article.

James J. McAndrews for the paper “The case for cash”, Volume 1, Number 1-4, 00004 for the Best Policy Article.

CEMLA measurements based on microdata from the 2021 National Financial Inclusion Survey show that 11.1 million people and 4.9 million households in Mexico receive remittances from abroad. This implies that 12.3% of adults in the country and 13.6% of households receive remittances. A high percentage of remittances are received by small communities in the country.

We are very excited to announce the XXVII Meeting of the Central Bank Researchers Network Conference organized by CEMLA. The Conference Program involves Keynote speeches by Enrique G. Mendoza and Pablo A. Guerrón-Quintana. Conference presentations will be held in person in Mexico City and digitally.

Submission deadline: August 5, 2022.

Please find the call for papers here

During the first quarter of 2022, employment and the wage bill of Mexican immigrant workers in the United States continued to increase, which favored their remittances to Mexico. In said quarter, this wage bill totaled 78.264 billion dollars and remittances sent to Mexico from that country reached 11.937 billion dollars, so that the percentage of income obtained that was sent as remittances to family members was 15.3%.

The Mexican immigrant population is present throughout the United States, but a small number of states concentrate most of the immigrant population. Thus, California and Texas are home to nearly three out of every five Mexican immigrants. In 2021, these two states accounted for 52% of the employment of Mexican immigrant workers and generated 53% of the total wages earned by this immigrant group. That year, 49% of remittances received by Mexico came from California and Texas.

The note measures remittance inflows in Mexico in relation to the country's main macroeconomic indicators, such as GDP, private consumption, public and private investment and external accounts. It highlights how the dynamism of remittances in recent years and the weakness of domestic economic activity have led to an increase in the size of remittances relative to macroeconomic aggregates.

The Latin American Journal of Central Banking (LAJCB) has published the article "Measuring systemic risk for bank credit networks: A multilayer approach", written by Ricardo Montañez-Enríquez, from CEMLA's Financial Stability Directorate, in collaboration with Eduardo Yanquen (Banco de la República), Giacomo Livan (University College London) and Serafín Martínez-Jaramillo (Banco de México). The article applies a variant of the DebtRank algorithm to identify the vulnerability of the Colombian banking system through a multilayer approach in its credit portfolios, showing the heterogeneity of the risk profiles of its members and the presence of network effects capable of propagating shocks in the system. The report is available at the following link.

The Latin American Journal of Central Banking (LAJCB) has published a new study by Anahí Rodríguez-Martínez, from CEMLA’s Directorate of Financial Stability, in coauthorship with Fernando Borraz (Banco Central del Uruguay), Giacomo Livan (University College London) and Pablo Picardo (Banco Central del Ururguay). The paper is titled “Price, sales, and the business cycle: Microeconomic evidence”. This study uses a rich weekly price database to analyze the relationships among prices, sales, and business cycle conditions captured by the unemployment rate. Using a time-series PCA, the authors find that all product categories share a mutual correlation structure.

The Network for Greening the Financial System (NGFS) has published the final report of the joint Study Group on Biodiversity and Financial Stability. The report identifies environmental threats to the financial system and the role of central banks in mitigating financial risks arising from biodiversity losses. Ricardo Montañez-Enríquez, from CEMLA's Financial Stability Directorate, contributed to this report with an analysis on the exposure of the Mexican financial system to risks related to biodiversity losses. Among other results, the analysis highlights that 36% of bank credit in Mexico is related to industries highly dependent on ecosystem services. The report is available at the following link.

In 2020, the wage bill of Mexican immigrant workers in the United States declined due to the sharp drop in employment that occurred in the first months of the year. However, the recovery of employment and average wages of such workers throughout 2021 led their wage bill to reach US$283 billion that year. In 2021, the ratio of Mexico's income from remittances from the United States to the wage bill of Mexican immigrant workers in that country was 17.3%. In the first half of 2021, this ratio was 16.6% and rose to 17.9% in the second half of the year.

A research team from CEMLA’s Directorate of Financial Stability has published a new working paper in the Discussion Paper Series of the Halle Institute for Economic Research (IWH). The study is joint work with coauthors from Banco de México and explores the effect of financial development on the pass-through of financial stress to economic growth. The working paper can downloaded here.

During 2021, the increase in economic activity in the United States led to an increase of 433,900 jobs and 6.6% in the employment of Mexican immigrant workers. This improvement in employment was made up of 253,815 male workers and 180,085 female workers. The sectors of activity with the greatest increases in such employment were the construction industry with 180,000 jobs and food and lodging services with 138,000 jobs. It is worth to mention that in December 2021, Mexican immigrant workers in the United States represented 22.4% of the total number of workers in the construction industry.

In 2021, Mexico's remittance income has shown high growth financed mainly by a significant increase in the wage bill of Mexican immigrant workers in the United States. The higher wage bill has originated from a significant recovery in the employment of Mexican workers accompanied by increases in their average wages.

In an effort to enhance the understanding of the challenges posed by ecological degradation, Banco de México and CEMLA held an International Conference on Biodiversity and Environmental Challenges for the Financial System. The Conference, held digitally between November 30 to December 2, 2021, brought together scientists, policymakers, and representatives from private companies and NGOs to discuss the emerging challenges posed by biodiversity losses for the financial system. The agenda is available here, while a video record of the Conference’s sessions is available in Banco de México’s YouTube channel here.

CEMLA’s Directorate of Financial Stability co-organized jointly with the Bank of Canada, Banco de México, the Journal of Financial Stability, and the University of Zurich the IV Conference on Financial Stability. The Conference was held in digital format on November 23-25, 2021, and was attended by more than 120 representatives from universities, central banks, and CEMLA’s associated institutions. The Conference features sessions on topics related to network analyses, the intended and unintended consequences of regulation, and the effect of the COVID-19 crisis on the real sector, among others. The agenda, available here, included keynote sessions by Markus Brunnermeier, Director of the Bendheim Center for Finance, Princeton University and Jing Yang, Managing Director of the Bank of Canada’s Financial Stability Department.

Vacancy: Senior Research Economists and Research Assistants

Degree required: Doctorate/Master's degree
Job start date: Flexible
Job duration: The position offers a fixed-term contract that may be extended or made permanent depending on CEMLA’s organizational needs and the performance of the incumbent.
Interviews: Interviews will be conducted starting December 06, 2021, until job positions are filled.

The World Bank has highlighted recent work by Dr. Matias Ossandon Busch from the Directorate of Financial Stability on the effectiveness of macroprudential policies. The blog article summarizes the result of a research project on the transmission of reserve requirements within banks and across regions using granular data on the Brazilian banking system.

The pandemic that hit the world since the first months of 2020 also affected the remittances received by the countries of the Latin American and Caribbean region, showing strong decreases at the beginning of the second quarter of that year that, however, thanks to the elements that analyzed in the document, during the following months it was reversed and became a vigorous annual growth of 18.2% at the end of the year, which served as support to alleviate the effects of the pandemic among families in the countries receiving these resources.
The document also analyzes the behavior of the first half of 2021 and how the economic recovery of the remittance-sending countries is generating improvements in the sending of remittances, which allows forecasting even higher growth, between 17% and 22%, for the end of this year.