VoxEU Columnby Stephen Cecchetti & Jens Hilscher Central banks engaged in large-scale asset purchase programmes during and after the global financial crisis as well as during the COVID-18 pandemic, significantly increasing the size of their balance sheets. This column develops a framework for understanding the medium- and long-run implications of the losses arising from these[…]
Third edition of the FISEA This is the third edition of the European Central Bank’s biennial report on financial integration and structure in the euro area (FISEA). As explained in greater detail when the first edition was released in March 2020, it is designed to focus on structural developments in the financial system of the[…]
The ECB Blog Entry by Tom Hudepohl, Pamina Karl, Tobias Linzert, Benoit Nguyen, Marta Skrzypińska & Lia Vaz Cruz With the reduction of the Eurosystem’s balance sheet, central bank liquidity is declining. As liquidity is unevenly distributed among banks, an effective redistribution and use of market funding are essential. This worked well so far, with[…]
“All about finance” Blog Entry by Eduardo Mendoza, Martin Tobal & Lorenzo Menna Economists traditionally distinguish between short-term cyclical and long-term structural fluctuations in economic variables. However, recent research highlights the importance of medium-term fluctuations, particularly in capital flows for Emerging Market and Developing Economies (EMDEs), which can significantly predict financial crises. Link: “All about[…]
by Claudia Buch Speech by Claudia Buch, Chair of the Supervisory Board of the ECB, at ‘’the Week of the Environment” on “Working together for climate neutrality: what role do stable banks play?”. Links: Speech by Claudia Buch, Chair of the Supervisory Board of the ECB, at ‘’the Week of the Environment”
IMF Working Paper by Xiaodan Ding, Dimitrios Laliotis & Priscilla Toffano The authors developed a novel Systemwide Liquidity (SWL) framework to identify liquidity stress in the system that goes beyond banks and to assess the role played by non-bank financial institutions (NBFIs) in episodes of liquidity stress. The framework, which complements standard liquidity and interconnectedness[…]
VoxEU Column by Jon Danielsson Financial crises are not complicated, and many claim to know why they happen and how to prevent them. Why then do they happen with such alarming frequency? This column argues that a key reason is failures in regulation, and proposes that the financial authorities instead adopt a fundamental concept from[…]
ECB Supervision Blog Entry by Claudia Buch, Chair of the Supervisory Board of the ECB The Supervisory Board has decided to update its annual health check of banks, the Supervisory Review and Evaluation Process. Triggered by structural shifts, new risks and external shocks, the changes aim at making the SREP more efficient and effective. Links:[…]
Why apply? The current polycrisis is a catalyst for far-reaching structural change that lies ahead of European society. Rebuilding more resilient and sustainable social systems will require the mobilisation and (re)allocation of vast financial resources between governments, firms, and households. Whereas the financial system plays a pivotal role in this intermediation process, it is also[…]
EBA Press Release The European Banking Authority (EBA) published its Q4 2023 quarterly Risk Dashboard (RDB), which discloses aggregated statistical information for the largest EU/EEA institutions. EU/EEA’s banks capitalisation stands at record levels, liquidity has improved, while return on equity (RoE) stood at 10.3%. Yet, early signs of credit quality deterioration have become more apparent.[…]