VoxEU Column – Old risks in new clothes: The changing nature of capital flows

By Cathérine Casanova, Beatrice Scheubel, Livio Stracca Since the Global Crisis, the channels of capital flows have changed significantly. This column analyses key trends and underlying drivers of capital flows since the Global Crisis, including the policy trade-offs. It documents the increasing importance of market-based funding, a growing reliance on domestic currency liabilities, and a[…]

VoxEU Column: Lower for longer – macroprudential policy issues arising from the low interest rate environment

By John Fell, Tuomas Peltonen, and Richard Portes At the end of 2019 the European Systemic Risk Board General Board mandated a Task Force on Low Interest Rates to revisit the ESRB’s 2016 report on “Macroprudential policy issues arising from low interest rates and structural changes in the EU financial system”, assess subsequent developments, compare[…]

October 2021: ECB – Supervisory banking statistics for the second quarter of 2021

Aggregate Common Equity Tier 1 ratio stood at 15.60% in second quarter of 2021, up from 15.49% in previous quarter Aggregate non-performing loans ratio fell further to 2.32% (down from 2.54% in previous quarter), with stock of non-performing loans declining to €422 billion (down from €455 billion in previous quarter) Aggregated annualised return on equity[…]

September 2021: BIS Quarterly Review – Seven decades of international banking

By Patrick McGuire and Philip Wooldridge International banking grew rapidly from the 1950s to the 2000s, propelled by banks avoiding regulations that burdened their domestic funding, by financial liberalisation that expanded investment opportunities, and by financial innovation that offered new tools to manage risks. The core of the market is offshore, where lenders and borrowers[…]

September 2021: BIS Quarterly Review – Funding for fintechs: patterns and drivers

By  Giulio Cornelli, Sebastian Doerr, Lavinia Franco and Jon Frost This special feature examines trends in equity funding for financial technology firms (fintechs) and the underlying country-specific drivers. Fintechs have raised over $1 trillion in equity globally since 2010. While the investment landscape was initially quite concentrated, it has become more diverse, both geographically and[…]

September 2021: ECB Strategy Review 2020/21 – Climate change and monetary policy in the euro area

This paper analyses the implications of climate change for the conduct of monetary policy in the euro area. It first investigates macroeconomic and financial risks stemming from climate change and from policies aimed at climate mitigation and adaptation, as well as the regulatory and fiscal effects of reducing carbon emissions. In this context, it assesses[…]

September 2021: BIS Quarterly Review – Covid-19 policy measures to support bank lending

By Catherine Casanova, Bryan Hardy and Mert Onen In the wake of the Covid-19 fallout, policymakers enacted a wide range of measures to support the flow of credit. Some measures strengthened banks’ lending capacity by preserving their capital and encouraging flexibility in loss accounting. Others, such as state-backed loan guarantees or funding for lending programmes,[…]

SSRN Working Paper: The Effect of ESG Disclosure on Corporate Investment Efficiency

Author(s): Elsa Allman and Joonsung Won Date: March 2021 Abstract: This paper examines the effects of environmental, social and governance (ESG) disclosure on investment efficiency, using the adoption of Directive 2014/95/EU as a quasi-natural shock on disclosure quality. We document a significant and robust reduction of underinvestment for U.S. firms with significant activities in the[…]

OECD Working Paper: Extreme capital flow episodes from the Global Financial Crisis to COVID-19

Author(s): Annamaria de Crescenzio and Etienne Lepers Date: July 2021 Abstract: The COVID-19 pandemic triggered a sudden funding squeeze manifested in major disruptions in international capital flows, the most dramatic of the wave of extreme capital flow episodes since the global financial crisis (GFC). This paper contributes to efforts to better understand this extreme episode[…]