By Anneke Kosse and Ilaria Mattei Most central banks are exploring central bank digital currencies (CBDCs), and more than a quarter of them are now developing or running concrete pilots. This BIS paper updates earlier surveys that asked central banks about their engagement in this area. The latest responses from 81 central banks show that[…]
By Financial Stability Board (FSB) The growth in external USD financing from non-bank financial institutions following the 2008 global financial crisis has created new financial stability challenges for emerging market economies. Link: US Dollar Funding and Emerging Market Economy Vulnerabilities
By Mairead McGuinness Cryptocurrency is going mainstream. Just think back to the Super Bowl ads. More and more investors – including many young people – are dabbling in the crypto marketplace, lured in by social media, promises of high returns and the prospect of building a new, open and innovative financial system. But investments in volatile digital[…]
By Maurizio Trapanese The non-bank financial intermediation (NBFI) sector has grown considerably over the past decade to represent almost half of global financial assets, compared with 42% in 2008.1 It plays a key role in the financing of the real economy and in the management of the global financial assets. This expansion has mainly been[…]
By Iñaki Aldasoro, Sebastian Doerr, Haonan Zhou In this box, we investigate the flight home effect (FHE) among non-banks. The FHE refers to the finding in Giannetti and Laeven (2012) that, during financial crises in their home country, lead arranger banks cut lending to foreign borrowers by more than they did to domestic borrowers. Giannetti[…]
By Isabel Argimón, María Rodríguez-Moreno In recent decades, we have witnessed the expansion of complex institutions, which are organised in different legal entities and conduct different business in different locations. The diversification benefits that may arise because of the different sources of income and of the lack of synchronization have to be balanced against the[…]
By Jean-Charles Bricongne, Rémy Lecat Despite the large capital outflows during the Covid-19 crisis, emerging economies did not make extensive use of capital controls. Indeed, these have had limited effects on capital outflows, being more effective on inflows. This column shows that macroprudential measures on the financial sector, which are increasingly part of the policy[…]
By Tobias Adrian Russia’s invasion of Ukraine raises financial stability risks for the world and poses questions about the longer-term impact on economies and markets. The war, amid an already slowing recovery from the pandemic, is set to test the resilience of financial markets and poses a threat to financial stability as discussed in our[…]
By Tobias Adrian, Gita Gopinath, Pierre-Olivier Gourinchas, Ceyla Pazarbasioglu, and Rhoda Weeks-Brown Capital flows can help countries to grow and to share risks. But economies with large external debts can be vulnerable to financial crises and deep recessions when capital flows out. External liabilities are riskiest when they generate currency mismatches—when external debt is in[…]
By Pablo Hernández de Cos The term crypto-assets typically refers to a wide range of highly heterogeneous assets whose common trait is the fact that they are a digital representation of value or a set of contractual rights. Moreover, crypto-assets rely heavily on distributed ledger technology (DLT) for their transmission, trading and storage. However, unlike[…]