February 2021: New VoxEU Column – How much capital should banks hold?

By Caterina Mendicino, Kalin Nikolov, Juan Rubio-Ramirez, Javier Suarez, and Dominik Supera Well-capitalised banks make the financial system more resilient to episodes such as the COVID-19 crisis. This column assesses how much capital would be optimal for banks to hold, taking into consideration the risk of banking crises driven by borrower defaults. It finds that[…]

January 2021: New VoxEU Column: The effects of ‘global systemically important bank’ designation on corporate lending

By Hans Degryse, Mike Mariathasan and Thi Hien Tang Frequent bailouts during the Global Crisis showed that governments cannot credibly commit not to support large financial institutions. This inability leads to moral hazard and motivated the Financial Stability Board’s framework for ‘global systemically important banks’. This column explores the net effects of this framework on[…]

January 2021: New ECB Research Bulletin article: How much capital should banks hold?

By Caterina Mendicino, Kalin Nikolov, Juan Rubio-Ramirez, Javier Suarez and Dominik Super Episodes such as the current coronavirus (COVID-19) crisis might lead to a significant rise in borrower defaults and, consequently, weakness in the banking sector. Having well-capitalised banks makes the financial system more resilient to such episodes. We assess how much capital would be[…]

January 2021: New Bank Underground Post – How does international capital flow?

By Michael Kumhof, Phurichai Rungcharoenkitkul and Andrej Sokol Understanding gross capital flows is crucial for both macroeconomic and financial stability policy. However, theory is lagging behind empirical work, as much of the literature continues to rely on net capital flow models developed many decades ago. Missing from these models is an explicit tracking of the[…]

December 2020: New BIS Market Committee Compendium

The Compendium gives a comprehensive cross-country overview of the relevant aspects for monetary policy implementation. This includes information on eg institutional features of monetary policy frameworks, communication of policy and the “nuts and bolts” of operations (including reserve requirements, the modalities of standing facilities and the tools for open market operations). The Markets Committee shares[…]

December 2020: New FSB Report on Non-Bank Financial Intermediation 2020

The Global Monitoring Report on Non-Bank Financial Intermediation 2020 presents the results of its annual FSB monitoring exercise to assess global trends and risks in non-bank financial intermediation (NBFI), covering 29 jurisdictions that account for 80% of global GDP. The annual monitoring exercise focuses particularly on those parts of NBFI that may pose bank-like financial[…]

November 2020: New VoxEU Column – Resilience and fragility in global banking: Impacts on emerging economies

By Marina Conesa Martínez, Giulia Lotti and Andrew Powell Global banks are highly connected, and banking systems are only as strong as the weakest links in the network. This column analyses cross-border syndicated lending to emerging and developing countries from 1993 to 2020 and finds evidence of both resilience and fragility in the global financial[…]

October 2020: New EU blog article – Fostering the cross-border integration of banking groups in the banking union

By Andrea Enria and Edouard Fernandez-Bollo As we face the challenges raised by the coronavirus (COVID-19) pandemic, we should also focus on the actions needed to foster the integration of banking activities within the banking union. And this means, first and foremost, focusing on the functioning of banking groups with activities across different Member States.[…]