Central and Commercial Bank Balance Sheet Risk Before, During, and After the Global Financial Crisis

This paper presents an overview of exposures in the balance sheets of central banks, banks,and other depository institutions during the past decade, with emphasis on asset growth andcurrency composition. It exploits the IMF's SRF-based monetary data to show: (i) there wasa widely observed buildup of assets prior to the global financial crisis, but there has been nosignificant reduction in its wake; (ii) the foreign currency composition of the balance sheetsof banks and other depository institutions remained remarkably constant in spite of the crisis,significant changes in the composition of balance sheets, and globalization, and does notseem to have been significantly influenced by the behavior of exchange rates; and(iii) exposure to households increased prior to the crisis, but this increased risk was offset byincreased capitalization.