by the Financial Stability Board The Financial Stability Board (FSB) published the 2023 list of global systemically important banks (G-SIBs) using end-2022 data and applying the assessment methodology designed by the Basel Committee on Banking Supervision (BCBS). One bank (Bank of …
by Francesca Diluiso, Barbara Annicchiarico and Marco Carli While climate change is often seen as a long-term concern, climate mitigation policies can have different short-term effects, since they affect the transmission mechanism of conventional macroeconomic shocks.In a new working paper, the …
by Raphael Auer, Giulio Cornelli and Christian Zimmermann We present a ranking of journals geared toward measuring the policy relevance of research. We compute simple impact factors that count only citations made in central bank publications, such as their working paper series. Whereas this …
by the Financial Stability Board The FSB developed key performance indicators (KPIs) to operationalize the monitoring of the targets set by the G20 in order to address challenges in cross-border payments. These KPIs measure either directly or indirectly the extent …
by Whitney Zhang Referring to the NBER Working Paper Bank Branch Density and Bank Runs by Efraim Benmelech, Jun Yang, and Michal Zator this article points out that stock prices of banks with low branch density experienced larger declines around recent bank failures. The authors …
by Andrea Ajello, Michele Cavallo, Giovanni Favara, William B. Peterman, John W. Schindler IV, and Nitish R. Sinha This FEDS note proposes a new index that can be used to gauge broad financial conditions and assess how these conditions are …
by Bryan Hardy and Sonya Zhu This special feature of the BIS Quarterly Review examines international banks’ deposit funding – traditional deposits, repos and interbank lending. The authors lay out a framework to interpret the observed evolution in the level …
By the European Banking Authority The European Banking Authority (EBA) updated the 13 systemic importance indicators and underlying data for the 32 largest institutions in the EU whose leverage ratio exposure measure exceeds EUR 200 bn. This disclosure includes updated …
By Kristin Forbes, Christian Friedrich and Dennis Reinhardt Recent episodes of financial stress, including the ‘dash for cash’ at the onset of the Covid-19 (Covid) pandemic, pressure in the UK’s liability-driven investment funds in 2022, and the collapse of Silicon …
By International Monetary Fund Financial stability risks have increased rapidly as the resilience of the global financial system has been tested by higher inflation and fragmentation risks. Chapter 1 analyzes the recent turmoil in the banking sector and the challenges …
By Gaston Gelos, Maria Soledad Martínez Pería, Erlend Nier, Fabian Valencia While many emerging economies have been using macroprudential policy tools for some time, their use to safeguard financial stability was only embraced more widely in response to the global …
By Mario Catalán, Fabio Natalucci, Mahvash S. Qureshi, Tomohiro Tsuruga IMF Bolg: Rising tensions could trigger cross-border capital outflows and increased uncertainty that would threaten macro-financial stability Link: Geopolitics and Fragmentation Emerge as Serious Financial Stability Threats
By Pinelopi K. Goldberg, Tristan Reed Data on global trade as well as capital and labor flows indicate a slowdown, but not reversal, of globalization post the 2008-09 financial crisis. Yet profound changes in the policy environment and public sentiment …
The European Banking Authority (EBA) published its Annual Report that sets out the activities and achievements in 2022 and provides an overview of the key priorities for 2023. Link: EBA Annual Report highlights key achievements in 2022
The European Banking Authority (EBA) updated today the list of other systemically important institutions (O-SIIs) in the EU, which, together with global systemically important institutions (G-SIIs), are identified as systemically important by the relevant authorities according to harmonised criteria laid …
IFC Bulletin, No 58 Proceedings of the 11th Biennial IFC Conference on “Post-pandemic landscape for central bank statistics”, BIS Basel, 25-26 August 2022. Link: Post-pandemic landscape for central bank statistics
By Yiping Huang, Xiang Li, Han Qiu, Changhua Yu By comparing business loans made by a BigTech bank with those made by traditional banks, this study finds that BigTech loans tend to be smaller, and the BigTech lender is more …
By Ernest Dautović, Leonardo Gambacorta, Alessio Reghezza The ECB recommended that banks not pay out dividends during the COVID-19 pandemic. This column shows that the recommedation led to increased lending to non-financial corporations, with lending by complying banks around 2.2 …
By Paul De Grauwe, Yuemei Ji Since central banks started their fight against inflation, they have transferred massive amounts of their profits to banks. The authors of this column have suggested that minimum reserve requirements are a valid alternative, but …
Published as part of the Financial Stability Review. Changes in the cost and the composition of bank deposits have important implications for banks’ net interest income. This, in turn, affects their retained earnings, capital position, overall resilience and hence their …
By Claudia Buch, Linda S. Goldberg, Björn Imbierowicz Recent geopolitical events have raised concerns that markets for goods and services could become more fragmented. Clearly, trade uncertainty has increased. The consequences for financial intermediation of fragmentation and uncertainty are not …
By Aymo Brunetti The subsidised emergency takeover of Credit Suisse by UBS brings the current global ‘too big to fail’ regime into question. This column argues that an in-depth analysis of the global resolution framework by both regulators and academics …
This report summarizes the Federal Reserve Board’s framework for assessing the resilience of the U.S. financial system and presents the Board’s current assessment. By publishing this report, the Board intends to promote public understanding and increase transparency and accountability for …
Banks’ ability to temporarily contract their balance sheets around reporting dates to report more favourable regulatory metrics – a regulatory arbitrage practice commonly referred to as window dressing – poses a risk to financial stability. In this paper, we investigate …
The European Central Bank (ECB) and the Single Resolution Board (SRB) welcome the European Commission’s proposed legislative changes to the European bank crisis management and deposit insurance framework. Link: ECB and SRB welcome European Commission’s legislative proposals for bank crisis …
The European Commission has today adopted a proposal to adjust and further strengthen the EU’s existing bank crisis management and deposit insurance (CMDI) framework, with a focus on medium-sized and smaller banks. Link: Banking Union: Commission proposes reform of bank …
By Gaston Gelos, Maria Soledad Martinez Peria, Erlend Nier, Fabian Valencia While many emerging economies have been using macroprudential policy tools for some time, their use to safeguard financial stability was only embraced more widely in response to the global …
By Isabel Schnabel The ECB’s unconventional monetary policy measures have significantly expanded its balance sheet over the past eight years, including a significant growth of excess reserves on the liabilities side. In recent years, these excess reserves have been instrumental …
By Naz Koont, Tano Santos, Luigi Zingales Bank regulators have always assumed that bank deposits are ‘sticky,’ but the advent of digital banking is changing that. New research focuses not on the danger of bank runs, but rather on the …
By Antonio Garcia Pascual, Fabio Natalucci, Thomas Piontek NBFIs have emerged as key players in the financial sector, and global financial stability could hinge on their resilience as policy is tightened to tackle high inflation Link: Nonbank Financial Sector Vulnerabilities …
By Pilar Castrillo, Martin Iseringhausen, Rolf Strauch Over the coming years, the current tightening of financial conditions could diminish the financial vulnerabilities coming from high asset prices that built up during the period of low interest rates. But there are …
By Jon Danielsson, Charles Goodhart The downfall of Silicon Valley Bank and Credit Suisse has exposed failures in how we regulate the financial system. This column argues that the problems we now see in the system have arisen because the …
By Viral Acharya, Rahul Chauhan, Raghuram Rajan, Sascha Steffen The last round of quantitative tightening caused two episodes of significant liquidity stress in US financial markets. This column asks whether the prior expansion and then shrinkage of the Fed’s balance …
The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Federal Reserve and the Swiss National Bank are today announcing a coordinated action to enhance the provision of liquidity via the standing US …
By Stephan Luck and Sergio Correia Call reports—regulatory filings in which commercial banks report their assets, liabilities, income, and other information—are one of the most-used data sources in banking and finance. Though call reports were collected as far back as …
By Financial Stability Board (FSB) The Financial Stability Board (FSB) today published a report on the financial stability risks of Decentralised Finance (DeFi). DeFi is commonly used to describe services in crypto-asset markets that aim to replicate some functions of …
By European Central Bank ECB Banking Supervision aims to keep banks sound and healthy. This requires ongoing supervision of their activities today, as well as making sure they are fit for tomorrow. Especially in uncertain times, effectively adapting business models …
By Wenxin Du Foreign banking organizations (FBOs) in the United States play an important role in setting the price of short-term dollar liquidity. In this post, based on remarks given at the 2022 Jackson Hole Economic Policy Symposium, we highlight …
By Shekhar Aiyar and Anna Ilyina Trade openness increased after the Second World War, but has slowed following the global financial crisis. Link: Charting Globalization’s Turn to Slowbalization After Global Financial Crisis
By European Banking Authority The European Banking Authority (EBA) published today its final Guidelines addressed to resolution authorities for the publication of their approach to the bail-in tool implementation. Transparency and predictability are key both to the credibility of the …
By Gabriel Jiménez, Dmitry Kuvshinov, José-Luis Peydró, and Björn Richter Central banks have been raising interest rates to fight inflation, after a period when rates were first cut and then kept low. This column uses data for 17 developed countries …
By Daniel Hinge Keeping monetary policy too loose for too long can lead to a “big” increase in the risk of a financial crisis, new research into a controversial area of policy finds. Maximilian Grimm, Òscar Jordà, Moritz Schularick and …
By Christopher Clayton, Amanda Dos Santos, Matteo Maggiori, and Jesse Schreger China’s strategy for internationalising the renminbi involves controlling the access of foreign investors to the domestic bond market. This column argues China’s policy involves a trade-off between building a …
By European Banking Authority The European Banking Authority (EBA) published today its annual quantitative Report on minimum requirement for own funds and eligible liabilities (MREL) with data as of December 2021. The Report is complemented by an analysis looking into …
By Skander J. Van den Heuvel The stringency of bank liquidity and capital requirements should depend on their social costs and benefi ts. This paper investigates their welfare effects and quantifies their welfare costs using sufficient statistics. The special role of …
By André Sapir There is a view that globalisation is in retreat. It has produced immense wealth, but has also generated huge inequality, leading to an economic and political backlash. Not everyone agrees with this view, though globalisation is seen …
By Wenxin Du Foreign banking organizations (FBOs) in the United States play an important role in setting the price of short-term dollar liquidity. In this post, based on remarks given at the 2022 Jackson Hole Economic Policy Symposium, we highlight …
By Kristina Bluwstein, Sudipto Karmakar, and David Aikman Inflation reached almost 9% in July 2022, its highest reading since the early 1990s. A large proportion of the working age population will never have experienced such price increases, or the prospect …
By Beiträge von Redaktion What do we know about the holders of bail-inable securities in the Banking Union? Those questions and more is to be answered in this in-depth analysis by FMF cooperation partner Leibniz Institute for Financial Research SAFE. …
By Financial Stability Board (FSB) This report presents the results of the FSB’s annual global monitoring exercise, covering 29 jurisdictions that account for around 80% of global GDP. The report mainly covers developments in 2021, during which most economies experienced …
By Matteo Crosignani, Thomas Eisenbach, and Fulvia Fringuellotti To assess the vulnerability of the U.S. financial system, it is important to monitor leverage and funding risks—both individually and in tandem. In this post, the authors provide an update of four …
By Bank for International Settlements (BIS) The Basel Committee on Banking Supervision today issued a third report on its evaluation of the impact and effectiveness of implemented Basel reforms. Evaluation of the impact and efficacy of Basel III reforms sets out …
By Rens van Tilburg, Seraina Grünewald, Dirk Schoenmaker, and Arnoud Boo Climate risks are building up on banks’ balance sheets. Supervisory reviews show that banks are not well prepared. Yet, supervisors have been slow to include climate risks in minimum …
By Luc Laeven, Angela Maddaloni and Caterina Mendicino What are the trade-offs involved in the implementation of macroprudential and monetary measures? And how do monetary and macroprudential policies interact? Recent research conducted at the European Central Bank (ECB) tackles these …
By Ulrich Bindseil and Jürgen Schaaf Amid the widespread fallout in crypto markets following the collapse of a major crypto exchange, The ECB Blog takes a look at where we stand with Bitcoin. Link: Bitcoin’s last stand
By Financial Stability Board The Financial Stability Board released a progress report that describes progress over the past year and planned work by the Board, as well as by standard-setting bodies (SSBs) and other international organisations, to enhance the resilience …
By Financial Stability Board New shocks may expose a number of current vulnerabilities while a number of vulnerabilities associated with structural changes are emerging. This annual report provides an overview of the FSB’s work to tackle a number of current …
By BIS The BIS Quarterly Review examines developments in international banking and financial markets. Published in March, June, September and December, it comprises a review of market developments over the past quarter, and special features that analyse topical economic and financial issues. …
By Nicholas Apergis, Ahmet F. Aysan, and Yassine Bakkar To avoid excessively high interest rates, with their impact on financial stability, some central banks desire to use more macroprudential policies in their policy formulations. Nicholas Apergis, Ahmet F. Aysan, and Yassine …
By The World Bank Over a decade has passed since the onset of the largest global economic crisis since the Great Depression. The crisis revealed major shortcomings in market discipline, regulation, and supervision. The Global Financial Development Report 2019/2020 provides …
By European Central Bank Risks to financial stability in the euro area have increased amid soaring energy prices, elevated inflation and low economic growth, the November 2022 Financial Stability Review published today by the European Central Bank (ECB) shows. At …
By European Central Bank The European Central Bank (ECB) today published the results of its thematic review, which shows that banks are still far from adequately managing climate and environmental risks. The ECB is now setting staggered deadlines for banks …
By Ralph De Haas and Çağatay Bircan After years of rising indebtedness and the Covid-19 pandemic, financially weak firms are constraining business dynamism across emerging Europe. This fourth in series of five columns looks at zombie lending and its economic …
By Naoto Takemoto, Simon Jurkatis, and Nicholas Vause In less than two decades, the system of market-based finance (MBF) – which involves mainly non-bank financial institutions (NBFIs) providing credit to the economy through bonds rather than loans – has both …
By Bassel Committee The Basel Committee provides additional information regarding the 2022 G-SIB assessment. Further details of the assessment include global denominators and individual bank indicators.The release accompanies the Financial Stability Board’s updated G-SIB list. These additional details will help …
By Press Financial Stability Board This press release reports that the Financial Stability Board (FSB) published the 2022 list of global systemically important banks (G-SIBs) using end-2021 data and applying for the first time the revised assessment methodology published in …
By Alain Naef, Eric Monnet, Camille Macaire, Arnaud Mehl, Barry Eichengreen The share of China’s renminbi in global reserve portfolios is around 3%, compared to 60% for the US dollar. This column argues that the renminbi can play a more …
By Beatrice Weder di Mauro, Jeromin Zettelmeyer, Tobias Tröger, Nicolas Véron, Jean Pisani-Ferry, Franz C. Mayer, Philippe Martin, Jan-Pieter Krahnen, Thorsten Beck Although more progress has been achieved than most observers could have imagined 12 years ago, the European Banking …
Galina Hale and Bhavyaa Sharma from UC Santa Cruz are working on a meta-analysis paper of climate risk pricing. If you can suggest papers they should include in the meta-analysis, please suggest them via this form: https://forms.gle/g6ZZFUECsoUQfi5dA
By Jean Imbs, Laurent Pauwels The pandemic and the war in Ukraine have resuscitated concerns over exposure to foreign shocks. But while measures of ‘openness’ abound, their ability to capture the influence of foreign developments on domestic outcomes remains speculative. …
The Covid-19 pandemic and the war in Ukraine have furthered a sustained retreat from global banking. The funding sources of local banking systems have shifted from cross-border to local and, within cross-border, from inter-office to unrelated sources. An increased share …
Central banks and other supervisory authorities have made significant efforts to collect borrower-level data on debt vulnerabilities. Do such data add to the information in aggregate measures? We find that statistics about household and non-financial corporate borrowers with low repayment …
By Maurice Obstfeld and Haonan Zhou In May 2022, the Federal Reserve (Fed) announced that the process to reduce the size of its balance sheet would begin on June 1. With that process now underway, this post reviews the initial …
By Iñaki Aldasoro, Peter Hördahl and Sonya Zhu When financial markets come under pressure, vital functions such as the efficient allocation of capital and price formation become impaired. It is therefore important to enhance the monitoring and analysis of market …
By the European Central Bank (ECB) The climate crisis is one of the biggest challenges of our time. It poses severe risks for the economy and it affects price stability, our core mandate as a central bank. This is why …
by Claudia Buch Speech by Prof Claudia Buch, Vice-President of the Deutsche Bundesbank, at the 11th Biennial Irving Fisher Committee (IFC) Conference, Basel, 25 August 2022. Link: Time for structural change in central bank statistics? How to support the transition …
The Global Financial Development Database is an extensive dataset of financial system characteristics for 214 economies. It contains annual data, starting from 1960. It has been last updated in September 2022 and contains data through 2021 for 108 indicators, capturing …
By Maurice Obstfeld and Haonan Zhou Arising dollar—driven by the Federal Reserve’s inflation-quelling interest rate increases and investors’ diminished risk appetite—could cause downturns in many emerging market and developing economies (EMDEs), suggests a paper discussed at the Brookings Papers on …
By Pamela Pogliani, Philip Wooldridge Cross-border financial centres (XFCs), which cater predominantly to non-residents, are important intermediaries of international financial flows. Considering the size and nature of XFCs’ activities, it is useful to distinguish them from other countries when analysing …
By Giovanni Covi, James Brookes and Charumathi Raja How banks are exposed to the financial system and real-economy determines concentration risk and interconnectedness in the banking sector, and in turn, the severity of tail-events. We construct the Global Network data …
By Isabel Schnabel Monetary policy and good luck, that is smaller economic shocks, played an important role during the Great Moderation, a period of broad macroeconomic stability. Following the pandemic and the war in Ukraine, there are reasons to believe …
By Linda Goldberg, Fabiola Ravazzolo With the onset of the Covid-19 pandemic, the Federal Reserve, along with other central banks, deployed international global liquidity backstops to counter stressed market conditions. This column analyses the effectiveness of central bank swap lines …
By Claudio Borio, Stijn Claessens and Nikola Tarashev We propose a framework for classifying regulatory measures with a financial stability objective as activity-based (AB) or entity-based (EB). AB measures constrain an activity on a standalone basis, whereas EB measures constrain a …
Key takeaways Banks’ cross-border claims rose by $1.4 trillion over the first quarter of 2022, the third largest quarterly expansion on record. Even on a seasonally adjusted basis, the expansion was unusual (+$700 billion), booked mostly vis-à-vis advanced economies (AEs). Banks’ cross-border claims on EMDEs …
By the ECB/ESRB Project Team on climate risk monitoring As work on laying the analytical foundations for measuring climate-related financial risk matures, there is a need to better gauge its implications for systemic risk, and associated scope for a macroprudential …
By Pamela Pogliani and Philip Wooldridge Financial centres that cater predominantly to non-residents – which we refer to as cross-border financial centres (XFCs) –are important intermediaries of cross-border financial flows. For analysing capital flows and international interconnectedness, it can be useful to distinguish countries …
By the European Systemic Risk Board (ESRB) The NBFI Monitor 2022 discusses the main developments related to investment funds and so-called other financial institutions (OFIs) in 2021 and provides an initial overview of the developments triggered by the war in …
By the Single Resolution Board (SRB) The Single Resolution Board (SRB) has today published its assessment of bank resolvability, for the first time. The resolvability assessment and ‘heat-map’ for 2021 shows that banks have made significant progress in the SRB’s priority …
By Financial Stability Board (FSB) When commissioned in late 2021, this report to the G20 was intended to discuss policies in the aftermath of a past shock. Since then, the economic and financial market situation has evolved considerably and vulnerabilities …
By the Single Resolution Board (SRB) The SRB today published its Annual Report for 2021. The report details the work of Europe’s Single Resolution Board and highlights the progress made in making Europe’s banking sector more stable, by ensuring all …
By Tobias Adrian and Jay Surti Countries have made substantial progress toward implementing capital markets regulatory reform, but important gaps remain and new challenges have raised the bar. Capital markets are like engines that help power the global economy: they perform best with …
By Darrell Duffie, Thierry Foucault, Laura Veldkamp, Xavier Vives The digitalisation of financial services presents formidable tests for incumbent financial intermediaries, firms, exchanges and regulators. The fourth report in the series on The Future of Banking examines the growing impact of …
Key takeaways Two powerful forces – the Covid-19 pandemic and the Russian invasion of Ukraine – shaped economic outcomes over the past year. Growth was resilient, at least until the outbreak of the Russia-Ukraine conflict. Inflation rose to multi-decade highs …
Key takeaways A burst of creative innovation is under way in money and payments, opening up vistas of a future digital monetary system that adapts continuously to serve the public interest. Structural flaws make the crypto universe unsuitable as the …
The creation of the Banking Union in 2014 was a powerful response to the financial crisis, with significant progress on an EU single rulebook, on the establishment of a new European architecture for supervision and resolution, and on reducing risks. This …
By Itai Agur, Xavier Lavayssière and Germán Villegas Bauer Environmentally conscious design can make a major difference in the energy efficiency of digital currencies. Most of the world’s central banks have already agreed they should help fight climate change, a critical challenge that necessitates reductions …
by Claudia Buch Speech by Prof Claudia Buch, Vice-President of the Deutsche Bundesbank, at the Centre for Economic Policy Research (CEPR) Symposium “Panel on systemic risk: Where is the next financial crisis coming from?” Link: Financial stability implications of the …
By Serkan Arslanalp, Barry Eichengreen and Chima Simpson-Bell The US dollar has long played an outsized role in global markets. It continues to do so even as the American economy has been producing a shrinking share of global output over the last two …
Key Takeaways: Basel Committee finalises principles for effective management and supervision of climate-related financial risks. Progresses work on specifying cryptoasset prudential treatment and issuing a second consultation paper. Finalises review of the treatment of cross-border exposures within the European Banking …
By Markus Behn, Jan Hannes Lang and Eugen Tereanu One important lesson learned from the use of capital-based macroprudential policies in recent years is that tightening such policies during boom phases is unlikely to have a notable impact on credit …
By Levent Altinoglu and Joseph Stiglitz The interconnected structure of the financial system has been a focal point of debate among policymakers in the wake of recent financial crises. This column offers a theory to help explain the structure of the …
By Iñaki Aldasoro, John Caparusso, and Yingyuan Chen Global banks establish their international presence through host-country networks of subsidiaries and branches. These entities’ roles and behaviour are illuminated by their balance sheet positions, but these have not been systematically captured …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
By Simon Gilchrist, Bin Wei, Vivian Yue, Egon Zakrajšek The interconnections between the balance sheet of a sovereign and those of global financial institutions can lead to a widening of sovereign spreads unrelated to country-specific fundamentals. This column explores this …
By Zsolt Darvas and Catarina Martins This briefing paper investigates the practice of close cooperation and examines the banking system performance in Bulgaria and Croatia. The factors that could pose risks to Bulgarian and Croatian banks are identified. This document …
By Aitor Erce, Enrico Mallucci, Mattia Picarelli The debt jurisdiction affects a government’s ability to restructure its debt, is key to shaping the restructuring process, and affects the timing and conditions of market access. This column introduces a new database …
By Angelo Duarte, Jon Frost, Leonardo Gambacorta, Priscilla Koo Wilkens and Hyun Song Shin Key takeaways Public payment infrastructures build on the central bank’s foundational role in the monetary system by promoting competition and interoperability between payment platforms. They can …
Heavily reliant on commodity exports, remittances and tourism, the economies of the Caucasus and Central Asia and their financial systems are vulnerable to volatile external shocks. The Chart of the Week shows how exposed countries in the region are to …
By the European Central Bank (ECB) ECB approves Cyprus’ RCB Bank’s sale of part of its loan portfolio to Hellenic Bank ECB restricts RCB’s business: it cannot take new deposits, grant new loans, or make new investments ECB appoints temporary …
by Financial Stability Board (FSB) This report examines whether the COVID-19 pandemic changed the ways in which individuals and firms engage with innovative financial service providers and traditional financial incumbents. Its main finding is that the pandemic has accelerated the …
Key Takeaways: Banks are increasingly exploring opportunities for using artificial intelligence (AI), including machine learning (ML). Banks’ use of AI/ML presents significant opportunities but can also heighten certain risks and challenges. The Committee intends to continue exploring banks’ use of …
by Jon Danielsson, Charles Goodhart, Robert Macrae The Western countries have sanctioned Russia in a way not applied to any globally integrated major power in over a century, ever since 1914. This column argues that there are lessons to be …
by Rachel Cho, Rodolphe Desbordes, Markus Eberhardt The current consensus in the literature that the finance-growth nexus is more complex than previously thought has led to concerns about ‘too much finance’. This column looks at the effects of ‘too much …
by Financial Stability Board (FSB) Crypto-asset markets are fast evolving and could reach a point where they represent a threat to global financial stability due to their scale, structural vulnerabilities and increasing interconnectedness with the traditional financial system. This is …
By Leora Klapper, and Yira Mascaró When COVID-19 hit, governments rushed to provide financial relief to citizens, often using digital channels to do so. At the same time, social distancing forced people to find alternatives to cash and face-to-face shopping. …
By Thorsten Beck, interviewed by Tim Phillips Since the GFC the UK has used innovative macroprudential and monetary policy tools to maintain stability. But the UK is an international financial centre, and so does this policy framework create spillovers in …
Banks’ cross-border claims increased by $228 billion in the third quarter of 2021, pushing their year-on-year (yoy) growth rate to 3%. Claims on non-bank financial institutions accounted for more than half of the quarterly increase. Non-US banks increased their US …
by Georgios Georgiadis, Gernot Müller, Ben Schumann In times of heightened global risk, investors flock to the dollar as their capacity or willingness to bear risk declines. As a result, the dollar appreciates. This column examines the effects of global …
Blog entry by Thorsten Beck, January 26, 2022 Complexity of banks poses governance and regulatory challenges – the more complex, the harder to govern and monitor and the harder to supervise and resolve in case of failure. And especially global …
By Stephen Millard, Margarita Rubio and Alexandra Varadi We use a DSGE model with financial frictions, leverage limits on banks, loan to value (LTV) limits and debt‑service ratio (DSR) limits on mortgage borrowing to examine: i) the effects of different …
by Benny Hartwig, Christoph Meinerding, and Yves S. Schüler In the aftermath of the global financial crisis, a consensus rapidly emerged that systemic risk – a central concept in financial stability – needed to be contained going forward. However, to …
By the US Federal Reserve System This paper examines the pros and cons of a potential U.S. central bank digital currency, or CBDC, and is the first step in a discussion of whether and how a CBDC could improve the …
By Linda Goldberg, and Fabiola Ravazzolo Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. This blog post discusses the contributions to financial and economic stability of dollar liquidity …
by the ESRB In a new report entitled “Will video kill the radio star?”, the ESRB’s Advisory Scientific Committee (ASC) takes stock of the many forces currently affecting Europe’s banking system (including climate change, the growth of non-banks, overbanking and …
By Jens Weidmann Ten years ago, almost to the day, I gave my first speech at the EBC. Back then, we were dealing with the aftermath of the global financial crisis, and the sovereign debt crisis was shaking the euro …
By Cyril Couaillier, Valerio Scalone This paper proposes a framework to jointly calibrate structural (constant) and cyclical (time varying) bank regulatory capital buffers. Its transparency helps to overcome the risk of omitting or double counting systemic risks when setting capital requirements. …
By Cathérine Casanova, Eugenio Cerutti, Swapan-Kumar Pradhan The global footprint of Chinese banks is substantial and growing, including during the COVID-19 pandemic. While they are similar to other banks from emerging countries in terms of their ownership and asset structure, …
By Alejandro Van der Ghote Short-term interest rates, particularly the natural rate, have been in steady decline in the euro area and the US. This column argues that in economies with low natural rates, such as the euro area today, …
by Luis de Guindos Speech by Luis de Guindos, Vice-President of the ECB, at the 5th ESRB Annual Conference Link: Macroprudential policy for non-bank financial intermediation
By Sirio Aramonte and Fernando Avalos The last two decades have seen the growth and consolidation of private markets. These revolve around funds gathered from institutional investors by “alternative asset managers”, typically private equity or venture capital firms that have subsequently expanded into credit. …
By the European Central Bank (ECB) The Financial Stability Review provides an overview of potential risks to financial stability in the euro area. It aims to promote awareness in the financial industry and among the public of euro area financial …
The European Commission has today adopted a review of EU banking rules (the Capital Requirements Regulation and the Capital Requirements Directive). These new rules will ensure that EU banks become more resilient to potential future economic shocks, while contributing to …
By Luis Garcia, Ulf Lewrick and Taja Sečnik Global systemically important banks (G–SIBs) are key nodes in the financial system. The identification of G–SIBs and the attendant calibration of capital surcharges to bolster their resilience is thus a supervisory priority. …
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 …
By: Carol Bertaut, Bastian von Beschwitz, and Stephanie Curcuru For most of the last century, the preeminent role of the U.S. dollar in the global economy has been supported by the size and strength of the U.S. economy, its stability …
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 …
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 …
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 …
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 …
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 …
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 …
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 …
By Shekhar Aiyar and Manasa Patnam Recent research suggests that World Bank aid disbursements are associated with outflows from recipient countries to offshore financial centres, indicating elite capture of aid. This column uses 25 years of data to examine whether …
by Isabel Schnabel Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Annual Congress of the European Economic Association (EEA). Link: The rise of non-bank finance and its implications for monetary policy transmission
By Jongrim Ha, M. Ayhan Kose and Franziska Ohnsorge Understanding the dynamics of inflation requires a comprehensive database that covers a large number of countries over a long period. This column introduces a new global database of inflation that has …
By Carolyn Rogers We are starting to see light at the end of the Covid-19 tunnel. With all this optimism, what could possibly go wrong for the global banking system? Consider the following three questions. First, as we begin to …
By Valentina Bruno and Hyun Song Shin The strength of the US dollar in currency markets has drawn the attention of researchers, policymakers, and businesses for decades. This column examines the effects of the dollar on international trade, with a …
By Agustín Carstens, Stijn Claessens, Fernando Restoy and Hyun Song Shin Key Takeaways: Big tech firms entering financial services can scale up rapidly with user data from their existing business lines in e-commerce and social media, and by harnessing the …
By Austen Saunders and Matthew Willison Banks come in different shapes and sizes. Do prudential regulations that work well for big banks work as well for small ones? To help us find out, we measure the effectiveness of some key …
By Randolph Bruno, Nauro Campos, Saul Estrin Do different economic integration arrangements vary in terms of their capacity to attract foreign direct investment? This column uses a structural gravity framework on annual bilateral FDI data for 142 countries between 1985 …
By Thomas Lambert, Enrico Perotti and Magdalena Rola-Janicka Political considerations have become important in finance research, with significant implications for policymaking. This column summarises new research presented at the CEPR conference on the Political Economy of Finance, including work on …
PolEconFin is a platform for researchers active in political economy of finance. This initiative seeks to provide a meeting point for theorists and empiricists with shared interests and build a research community with a focus on public policy. PolEconFin comprises …
By Miguel Ampudia, Thorsten Beck, Alexander Popov The trade-off between stability and growth has long been a subject of policy debate and informs views on the extent to which the supervision of banks should be centralised. This column presents analysis …
By Mikhail Mamonov, Anna Pestova and Steven Ongena Financial sanctions against Russia’s state-owned and controlled banks were imposed consecutively between 2014 and 2019, allowing banks that would potentially be targeted in the future to adjust their international and domestic exposures. …
By Christoffer Kok, Carola Müller, Steven Ongena and Cosimo Pancaro Since the financial crisis, stress tests have become an important supervisory and financial stability tool. Relying on confidential data available at the ECB, this column presents novel evidence that supervisory …
By Hans Degryse, Sotirios Kokas and Raoul Minetti Since the financial crisis, stress tests have become an important supervisory and financial stability tool. Relying on confidential data available at the ECB, this column presents novel evidence that supervisory scrutiny associated …
By Bilyana Bogdanova, Tracy Chan, Kristina Micic and Goetz von Peter This statistical feature presents a new data set on long-term debt securities issued by central and general governments in domestic and foreign currencies. It combines national aggregates with data …
By Cathérine Casanova, Beatrice Scheubel and 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 …
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 …
CfP Deadline Date: August 1, 2021 Conference Event: October 8, 2021 Event Location: Carcavelos, Portugal Keynote speaker(s): Edward I. Altman (NYU Stern) Organizer(s): Nova Finance Knowledge Center In cooperation with BPI, Nova Finance Knowledge Center is organizing an academic conference …
by Matthieu Darracq Pariès, Christoffer Kok, and Matthias Rottner The prolonged period of negative interest rates in advanced economies has raised concerns that further monetary policy accommodation could produce contractionary effects. Using a non-linear macroeconomic model fitted to the euro …
by the ESRB More than a year of restrictions on economic activity has so far not resulted in financial instability. However, the threat of a wave of insolvencies looms large, unless Member States manage a smooth transition from liquidity support …
by the Bank for International Settlements The two reports discuss transmission channels of climate-related risks to the banking system, and the measurement methodologies of climate-related financial risks. Climate risk drivers can be captured in traditional financial risk categories, but additional …
By the International Monetary Fund Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks. But actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities. …
By the International Monetary Fund Global prospects remain highly uncertain one year into the pandemic. New virus mutations and the accumulating human toll raise concerns, even as growing vaccine coverage lifts sentiment. Economic recoveries are diverging across countries and sectors, …
By Ryan Niladri Banerjee, Joseph Noss and Jose María Vidal Pastor Key takeaways Since the start of the Covid-19 pandemic, a “bankruptcy gap” has emerged between measures of expected and realised bankruptcies globally. The ample supply of credit to make …
By Emine Boz, Camila Casas, Georgios Georgiadis, Gita Gopinath, Helena Le Mezo, Arnaud Mehl and Tra Nguyen Authors Emine Boz, Camila Casas, Georgios Georgiadis, Gita Gopinath, Helena Le Mezo, Arnaud Mehl and Tra Nguyen conducted an extensive data-gathering exercise to …
by Luis de Guindos Speech by Luis de Guindos, Vice-President of the ECB, at the High-level conference on “Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union” organised by the European …
By. Boštjan Jazbec There is no doubt that 2020 was a milestone year in many people’s lives. At the SRB, 2020 also saw us hit two major milestones from a resolution planning perspective. […] Link: Making good progress on resolvability
By Iñaki Aldasoro, Egemen Eren, and Wenqian Huang Non-US banks’ on-balance sheet dollar liabilities rose in 2020 despite the decline in funding from US and offshore money market funds (MMFs). Other non-bank financial institutions were behind this increase, as they …
By John H. Cochrane This is a testimony concerning financial regulation in the context of climate change, presented to the US Senate Committee on Banking, Housing, and Urban Affairs. It was posted on Cochrane’s Blog “The Grumpy Economist”. Link: Testimony …
By Thorsten Beck, Elena Carletti, and Brunella Bruno The combined effect of the measures implemented to maintain banks’ ability to provide funds during the Covid crisis was to create a virtuous circle between corporates, banks, and sovereigns, avoiding a funding …
By Claudia M. Buch, Matthieu Bussière, and Linda S. Goldberg While policymakers around the world have aggressively and swiftly reacted to the common negative economic shock from COVID-19, the timing and forms of policy responses in the economic recovery stage …
by Luis de Guindos, Vice-President of the ECB Climate change is one of the greatest challenges facing humankind this century. If left unchecked, it is likely to result in more frequent and more severe climate events, causing widespread devastation and …
What factors drive the performance of national asset management companies? By Emilios Avguleas, Rym Ayadi, Marco Bodellini, Barbara Casu, Willem Pieter de Groen and Giovanni Ferr In the past decade, asset management companies (AMCs) have been an effective tool for …
by Bryan Hardy Key takeaways In the context of the Covid crisis, authorities adopted dividend payout restrictions to enhance bank resilience and support stronger growth in bank lending. Restrictions may reduce short-term equity returns for bank shareholders, especially in the case of …
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, …
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 …
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 …
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 …
Although global economic output is recovering from the collapse triggered by COVID-19, it will remain below pre-pandemic trends for a prolonged period. The pandemic has exacerbated the risks associated with a decade-long wave of global debt accumulation. It is also …
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 …
Based on the FSB’s recentaly released Global Monitoring Report on Non-Bank Financial Intermediation 2020, this dashboard visualizes the main monitoring aggregates mentioned in the report by jurisdiction. Link: Main monitoring aggregates of the FSB’s Global Monitoring Report on Non-Bank Financial …
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 …
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 …
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 …
The Latin American Journal of Central Banking (LAJCB) publishes high-quality research on topics that are of keen interest to central banks and associated financial regulatory and supervisory agencies. The LAJCB covers traditional topics such as monetary theory and policy, exchange …
by Reinout De Bock, Dimitris Drakopoulos, Rohit Goel, Lucyna Gornicka, Evan Papageorgiou, Patrick Schneider and Can Sever The COVID-19 pandemic caused an unprecedented sharp reversal of portfolio flows in emerging and frontier markets, triggering concerns about financial stability and consequently, …
by Bilge Erten, Anton Korinek and José and Antonio Ocampo Recent market volatility has underlined how fickle international capital flows can be, and how important it is for emerging economies to have an adequate system of macroprudential policies in place. …
By Henk Jan Reinders, Dirk Schoenmaker, and Mathijs van Dijk The severe economic impact of the COVID-19 pandemic could threaten financial stability. Since accounting-based methods report loan losses with a delay, this column adopts a real-time, market-based assessment of the …
The European Banking Authority (EBA) published today a discussion paper exploring ways on how to enhance the Bank Recovery and Resolution Directive (BRRD) framework on early intervention measures. The objective is to further enhance crisis management tools available for competent …
This year’s BIS Annual Economic Report is (naturally) centered around the topic of Covid-19 and its impact on the economy, including the chapters “A global sudden stop”, “A monetary lifeline: central banks” crisis response, and “Central Banks and Payments in …
by Jean Imbs and Laurent Pauwels Exposure to foreign shocks is often thought to be highly dependent on foreign trade and measures of openness usually build exclusively on measures of direct trade. This column argues that in a world of …
By Thorsten Beck, Francesco Mazzaferro, Richard Portes, Jean Quin, and Christian Schett On 27 May, the ESRB General Board adopted a wide-ranging recommendation to suspend pay-outs across different segments of the European financial system until the end of 2020. This …
A BIS report prepared by a Working Group chaired by Sally Davies (Board of Governors of the Federal Reserve System) and Christopher Kent (Reserve Bank of Australia) […] This report presents the Group’s findings. The growing share of the US …
Author(s): Ralph S. J. Koijen and Motohiro Yogo Date: June 2020 Abstract: Using international holdings data, we estimate a demand system for financial assets across 36 countries. The demand system provides a unified framework for decomposing variation in exchange rates, …
Author(s): Xin Liu, Shang-Jin Wei, Yifan Zhou Date: June 2020 Abstract: The opening of equity markets to foreign investment appears to generate an enormously large positive growth effect (see Bekaert, Harvey, and Lundblad, 2005) in spite of a relatively small …
Author(s): Sebastian Horn, Carmen M. Reinhart, Christoph Trebesch Date: June 2020 Abstract: Official (government-to-government) lending is much larger than commonly known, often surpassing total private cross-border capital flows, especially during disasters such as wars, financial crises and natural catastrophes. We …
This Quarterly Review draws on several BIS data sets to examine emerging market corporates’ external and foreign currency debt on the eve of the Covid-19 outbreak. It also assesses whether emerging market government debt is a cause for concern. Link: BIS Quarterly …
Published by the ECB Market infrastructures form the backbone of the financial system. They provide the networks through which financial institutions and financial markets are connected and financial transactions are cleared and settled. Therefore, it is essential to ensure that …
By Ozge Akinci, Gianluca Benigno, and Albert Queralto Liberty Street Economics features insight and analysis from New York Fed economists working at the intersection of research and policy. This blog post deals with the global effects of the COVID-19 sudden …
By Egemen Eren, Andreas Schrimpf, and Vladyslav Sushko Key takeaways: Dislocations in domestic US dollar money markets reverberated globally. Non-US banks lost a substantial part of funding from money market funds and had to borrow at shorter maturities. Nevertheless, the …
by Philip R. Lane, Member of the Executive Board of the ECB, at the Institute for Monetary and Financial Stability Policy Webinar, 19 May 2020 In my recent blog post, I described the range of scenarios that have been developed …
By Mitsutoshi Adachi, Matteo Cominetta, Christoph Kaufmann and Anton van der Kraai Stablecoins with the potential for global reach (“global stablecoins”) could help to address unmet consumer demand for payment services that are fast, cheap and easy to use and …
By Anil Ari, Sophia Chen, and Lev Ratnovski During crises, the number of loans that cannot be paid back increases. What are the lessons from past crises for non-performing loan resolution after COVID-19? In this article we use a new …
By the European Central Bank (ECB) The Financial Stability Review provides an overview of potential risks to financial stability in the euro area. It aims to promote awareness in the financial industry and among the public of euro area financial …
Building on the success of the MoFiR Workshop on Banking, we are launching a monthly series of MoFiR virtual seminars on banking and financial intermediation to maintain an active discussion on these important topics. The seminars will be open to …
Since the start of the Covid-19 pandemic, indicators of dollar funding costs in foreign exchange markets have risen sharply, reflecting both demand and supply factors. The demand for dollar funding has grown in recent years, reflecting the currency hedging needs …
The COVID-19 pandemic has caused an unprecedented human and health crisis. The measures necessary to contain the virus have triggered an economic downturn. At this point, there is great uncertainty about its severity and length. The latest Global Financial Stability Report …
Senior Economist Vladyslav Sushko discusses the main findings of the 2019 Triennial Central Bank Survey. Link: Triennial Central Bank Survey of Foreign Exchange and Over-the-counter (OTC) Derivatives Markets in 2019
The coronavirus (COVID-19) pandemic poses unprecedented health, economic, and financial stability challenges. Following the COVID-19 outbreak, the prices of risk assets collapsed and market volatility spiked, while expectations of widespread defaults led to a surge in borrowing costs. Several factors …
Countries around the world are easing bank capital requirements to help banks absorb losses and to allow them to maintain the flow of credit during the COVID-19 crisis. Most of these measures involve the Basel III capital standards that global …
This policy tracker summarizes the key economic responses governments are taking to limit the human and economic impact of the COVID-19 pandemic. The tracker includes 193 economies. Link: IMF Policy Tracker – Policy Responses to Covid-19
The world is coping with a global disaster, as the new Coronavirus takes a toll on many lost lives and a severe impact on economic activity. To provide a long-run perspective, this column documents the international response to a variety …
The COVID-19 pandemic has massive detrimental economic effects and demands immediate policy actions to prevent a financial or debt crisis. This column argues that while the fiscal policy responses in Europe have some merit in the short term, they put …
ECB gives banks further flexibility in prudential treatment of loans backed by public support measures ECB encourages banks to avoid excessive procyclical effects when applying the IFRS 9 international accounting standard ECB activates capital and operational relief measures announced on …
The Single Resolution Board (SRB) has decided that no compensation is due to shareholders and creditors affected by the resolution of Banco Popular Español, S.A. (BPE). It concluded that they would not have been better off under normal insolvency proceedings. …
The FSB, representing a broad and diverse membership of national authorities, international standard setters and international bodies, is actively cooperating to maintain financial stability during market stress related to COVID-19. The global financial system today is in a better position …
What’s going on in the financial markets at the moment, and what does might it mean for the economy? Torsten Slok, chief economist at Deutsche Bank, and Richard Portes of the London Business School, honorary president of the CEPR, explain …
Faced with growing uncertainty around the COVID-19 pandemic, countries around the world are taking extreme measures to lessen the already severe impact on their citizens’ health, well-being, and economic circumstances. What are the implications of the pandemic for the global …
To promote continuity in research, the Georgetown Center for Financial Markets and Policy @GUFinPolicy will be hosting a Global Virtual Seminar Series on FinTech via Zoom. Our plan is to involve researchers interested in FinTech in the US and around …
Years of quantitative easing by the ECB have suppressed sovereign yields to historic lows. This has contributed to a shadow banking boom, as market participants invested heavily in various private asset constructions. This column argues that the coronavirus shock poses …
In crises, the dollar tends to appreciate – especially against emerging market currencies – and dollar liquidity becomes scarce. This column shows that today’s events are following the historical pattern. Forex market turmoil is preceded by an inversion of the …
Governments are increasingly confronted with the task of preserving the positive effects of increased global integration while also managing their manifold side effects. This column looks at the effects of globalisation on inflation and financial stability and the role for …
The Single Resolution Board (SRB) today launches a public consultation on a number of substantial changes to its policy on the Minimum Requirement for Own Funds and Eligible Liabilities (MREL). These changes bring the policy in line with the amendments introduced …
Foreign exchange swaps and forwards are a key instrument in the global financial system for hedging, position-taking and short-term funding. They involve the exchange of notional amounts at a future date and, as funding vehicles, they are akin to other …
Global cross-border bank claims continued to expand rapidly, growing at 9% year on year. As in previous quarters, the expansion was mainly due to claims on the non-bank sector, which grew at 12% year on year. The growth in claims on …
The European Banking Authority (EBA) launched today a public consultation on possible future changes to the EU-wide stress test. This discussion paper aims to present the EBA’s vision of the future of the EU-wide stress test and to collect comments …
Capital flows to emerging markets have continued to be highly volatile since the Global Crisis. This column uses a new framework to show that country characteristics and policy responses matter for risks to future capital flows. It finds that good …
After the Global Crisis, accommodative monetary policy also eased financial conditions in emerging market economies. This column shows that US banks contributed to the transmission of US monetary policy and that regulation and supervision attenuated it. Only US banks that …
Since the G20 declared in 2009 that “the era of bank secrecy is over”, jurisdictions have implemented an unprecedented range of measures designed to increase tax transparency by ensuring that information on foreign financial assets would be disclosed to tax …
LTI@UniTO is a think tank established as a joint initiative of the Università di Torino and of the major Italian market players in long term financing. Through the Fellowship program, LTI@UniTO aims to foster research in long-term investing and to …
Central banks have been called on to contribute to fighting climate change. This column presents a framework for thinking about the issue and identifies some major trade-offs and choices. It argues that climate should be a major part of risk …
Targeted macroprudential policies may spill across sectors, but this does not mean that they are ineffective. This column shows how the effects of a countercyclical capital buffer designed to curb house price growth in Switzerland spilled over into commercial lending. …
Global Outlook: Fragile, Handle with Care. Global growth is expected to recover to 2.5 percent in 2020—up slightly from the post-crisis low of 2.4 percent registered last year amid weakening trade and investment—and edge up further over the forecast horizon. …
European banks have been criticised for holding too much domestic government debt during the recent euro area crisis, intensifying the doom loop between sovereign and bank credit risks. This column deviates from previous research that focused on ‘bad’ reasons for …
The global economy has experienced four waves of debt accumulation over the past fifty years. The first three debt waves ended with financial crises in many emerging and developing economies. The latest, since 2010, has already witnessed the largest, fastest …
Global imbalances are at the core of today’s trade tensions, but official current account statistics may not be sufficient to assess the external positions of financially integrated economies. For instance, balance of payments accounting standards do not prescribe the recording …
Macroprudential regulation is in vogue, but liquidity requirements are typically seen only as a microprudential tool. This column shows how a macroprudential approach to liquidity requirements could improve regulatory efficiency. By concentrating liquidity in systemically important banks, financial stability can …
The Financial Stability Board (FSB) today published the 2019 list of global systemically important banks (G-SIBs) using end-2018 data and an assessment methodology designed by the Basel Committee on Banking Supervision (BCBS). One bank (Toronto Dominion) has been added to …
Macroprudential policies are being implemented around the globe. A key question is whether these policies prompt substitution toward the non-bank financial sector. This column presents compelling evidence of such ‘waterbed effects’ after macroprudential policy action. Substitution towards non-bank credit is …
Filling the investment gap to achieve the sustainable development goals is one of the most important development challenges. Multilateral development banks can play an important role through a stronger engagement to attract additional resources from the private sector. This column …
There are still remarkable gaps in the data available on the overall structure of the financial systems of major economies. This column presents rough estimates for the UK and the US that suggest some surprising structural differences between the two …
One of the markets banks use to fund lending in foreign currencies – namely, using FX swaps to fund FX lending synthetically – has seen large dislocations in its pricing since the Global Crisis. This column documents that such dislocations affect the …
Non-performing assets are a double-edged sword. On the one hand, they often trigger episodes of financial crises. On the other, once a crisis erupts, market participants must have confidence in banks’ reported asset quality metrics in order to regain faith …
The decade since the Global Crisis has seen notable changes in the architecture of supervision, with separation of responsibility for monetary and financial stability having been reversed in many countries on the one hand, and a move towards more cross-border …
This occasional paper describes how the financial stability and macroprudential policy functions are organised at the ECB. Financial stability has been a key policy function of the ECB since its inception. Macroprudential policy tasks were later conferred on the ECB …
This paper describes the conceptual framework that guides assessments of financial stability risks for multilateral surveillance, as currently presented in the Global Financial Stability Report (GFSR). The framework emphasizes consistency in measuring financial vulnerabilities across countries and over time and …
Following the Global Crisis, countries have significantly increased their efforts to cooperate on bank supervision, the prime example being the euro area’s Single Supervisory Mechanism. However, little is known about whether such cooperation helps improve the stability of the financial …
Technology firms such as Alibaba, Amazon, Facebook, Google and Tencent have grown rapidly over the last two decades. The business model of these “big techs” rests on enabling direct interactions among a large number of users. An essential by-product of …
More than ten years have passed since the global financial crisis triggered a comprehensive regulatory reform process. Many important measures have been put in place since then. The title of the next panel discussion therefore raises a very pertinent question …
Focus The paper discusses why the financial system is not as resilient as policymakers currently claim – despite extensive regulatory reforms from a very weak starting point. Contribution The paper discusses different policy strategies for making some of the debt …
A structural feature of cross-border banking is its high degree of concentration, with a small number of very large bilateral links accounting for the lion’s share of total global cross-border bank credit. The largest links are almost exclusively between advanced …
The report summarises the responses received to the survey by Basel Committee member jurisdictions and those of the Basel Consultative Group. In brief, the majority of respondents to the survey currently apply proportionality measures in their jurisdictions. In most cases, …
There is global cycle in capital flows that is intimately connected to global risk. This column argues that, contrary to common wisdom, US monetary policy is not the only factor, or even the main factor, behind global risk and this …
Financial crises play a key role in changing existing policies concerning financial markets and institutions. This column provides new evidence for the negative impact of financial crises on the process of financial liberalisation. It also shows, however, that such interventions …
Deviations from covered interest parity represent, in theory, an arbitrage opportunity. This column shows that post-crisis, financial regulation may explain why this mispricing persists and cannot be arbitraged away. It also finds that more constrained dealers demand an extra premium …
Global growth has continued to soften this year. Subdued investment in emerging market and developing economies (EMDEs) is dampening potential growth prospects. Risks to the outlook remain firmly on the downside, including the possibility of escalating trade tensions. Another concern …
While the decade since the Global Crisis has seen clear improvements in financial regulation and supervision, there is still work to be done in several crucial areas, and political constraints may bite.This column introduces the first report in a new …
Call for Paper CfP deadline: 31 July, 2019 The special issue invites submissions of high-quality empirical research papers on topics related to the theme of changes in banks’ business models and their impact on credit supply. The banking sector is …
Frederic Boissay, Carlos Cantú, Stijn Claessens and Alan Villegas, March 5, 2019 The BIS is launching a public, online and interactive repository of studies on the effects of financial regulations, called FRAME. The purpose of this repository is to keep …
By Linda Goldberg, February 2019 Linda Goldberg of the Federal Reserve of New York talks about her work with Signe Krogstrup on a combined exchange market pressure index, which they use to look at the importance of the global factor …
Matt Lowe, Chris Papageorgiou, Fidel Pérez Sebastián 20 February 2019 Capital doesn’t flow to developing countries as much as economic theory suggests it should, and this might imply that capital is misallocated across nations. This column argues that once public …
Thorsten Beck 04 February 2019 Thorsten Beck argues that recent actions by the Italian and German governments threaten to undermine progress made in the euro area towards a Single Market in Banking and, thus, a more sustainable currency union. Link: …
Friederike Niepmann, Tim Schmidt-Eisenlohr 06 February 2019 The issuance of syndicated loans, including leveraged loans, has grown substantially in the US. Institutional investors increasingly hold these loans. This column discusses how this has created a strong link between the dollar …
Call for Paper Asia–Pacific Journal of Financial Studies (AJFS) invites manuscripts for a special issue on“Advances in International Finance in Emerging Markets” and related issues, scheduled for publication in 2020. AJFS became the first finance journal published in Asia-Pacific region …
The European Central Bank (ECB) is seeking applications from leading researchers for the Wim Duisenberg Research Fellowship. Fellowships are awarded annually. Successful candidates will conduct economic research in the ECB’s Directorate General Research (DG/R) for a period of two to …
The European Systemic Risk Board (ESRB) is an EU body with a mission to prevent and mitigate systemic risks to financial stability. The ESRB is chaired by the President of the European Central Bank, Mario Draghi, and its membership incorporates …
Ashoka Mody, Milan Nedeljkovic 14 January 2019 The ECB’s actions in the wake of the Global Crisis have been described as hesitant, relative to other central banks. Based on analysis of financial markets’ response to the ECB’s interventions during the …
Mathias Hoffmann, Egor Maslov, Bent Sørensen, Iryna Stewen 10 January 2019 Bank-to-bank lending in the euro area has increased, direct cross-border lending has not. The column shows that dependence on domestic banks reduces risk-sharing in a crisis, reducing GDP growth …
Eugenio Cerutti, Catherine Koch and Swapan-Kumar Pradhan, BIS quarterly review, December 16, 2018 Emerging market economies (EMEs) have substantially increased their footprint in the global economy over recent decades. They now produce about 40% of global GDP at market exchange …
Blog entry by Thorsten Beck, December 6, 2018 This week, the Eurogroup (Ministers of Finance of all Eurozone countries) agreed on some reforms for the banking union and Eurozone governance. As always, it is two steps forward and one step …
November 20, 2018 The evaluation is among the first under the FSB framework for the post-implementation evaluation of the effects of the G20 financial regulatory reforms, and forms part of a broader FSB examination of the effects of reforms on …
Meghana Ayyagari, Thorsten Beck, Maria Soledad Martinez Peria 11 December 2018 Macroprudential tools have been implemented widely following the Global Crisis. Using data from 900,000 firms in 49 countries, this column finds that such policies are associated with lower credit …
João Granja, Christian Leuz, Raghuram Rajan 04 December 2018 Risk taking was pervasive during the Global Crisis even in the most unlikely areas, such as stretching to lend at a distance. Using US data, this column examines the degree to …
Tobias Adrian, John Kiff 01 December 2018 The financial system has undergone far-reaching changes since the 2008 Global Crisis. This column casts those changes in terms of shifts in the way financial intermediaries manage their balance sheets, and also discusses …
Daniel Calvo, Juan Carlos Crisanto, Stefan Hohl 23 November 2018. A well designed financial supervisory architecture is essential for the effective functioning of any financial system. Using a survey of 82 jurisdictions, this column describes the state of financial supervisory …
Deutsche Bundesbank released its Financial Stability Review 2018. Link: https://www.bundesbank.de/resource/blob/766586/f9d675a9f6a50562291589f7f3409f5a/mL/2018-finanzstabilitaetsbericht-data.pdf
Job Openings for Economists: The Faculty of Economics and Business Administration at the Friedrich Schiller University Jena and the Halle Institute for Economic Research (IWH) – Member of the Leibniz Association jointly seek qualified candidates to fill a position at …
The European Banking Authority (EBA) published the results of the 2018 EU-wide stress test. Link: https://www.eba.europa.eu/-/eba-publishes-2018-eu-wide-stress-test-results
A new release of the InterConnectedness Newsletter is available for download. Link: http://bankinglibrary.com/interconnectedness_issues/2018Q4Halloween.pdf
A new IMF release is available for download. Global Financial Stability Report October 2018: A Decade after the Global Financial Crisis: Are We Safer? Link: https://www.imf.org/en/Publications/GFSR/Issues/2018/09/25/Global-Financial-Stability-Report-October-2018
Eugenio Cerutti, Stijn Claessens, and Luc Laeven, 18 September 2018 The Global Crisis was a catalyst for the adoption of macroprudential policies around the world. Using newly updated data, this column examines the adoption of macroprudential policy instruments from 2000 …
Björn Richter, Moritz Schularick, and Ilhyock Shim 21 September 2018 Central banks have increasingly relied on macroprudential measures to manage the financial cycle, but their effects on the core objectives of monetary policy to stabilise output and inflation are largely …
Ester Faia, Sébastien Laffitte, and Gianmarco Ottaviano, 20 September 2018 There is a general consensus that lax monetary policy and banking globalisation were two critical factors behind the Global Crisis. This column explores how banks’ decisions to enter foreign markets …
Vincent Bouvatier, Gunther Capelle-Blancard, Anne-Laure Delatte, 11 September 2018 Tax havens are estimated to concentrate 8% of global private financial wealth, reducing annual global tax revenues by about $200 billion. This column uses new country-by-country regulatory data on the foreign …
Bert Smid, Beau Soederhuizen, Rutger Teulings on 29 August 2018: New VoxEU Column The transition to a banking union for the EMU The transition to a European banking union is not straightforward. A key issue is how to prioritise risk …
Signe Krogstrup and Cédric Tille 29 August 2018: How global factors affect banks’ foreign currency funding: It depends on the exposure Volatility in international capital flows can disrupt international trade and finance. This column explores the role of agents’ exposure …
Bolton, P., and M. Oehmke (2018): Bank resolution and the structure of global banks. When banks are too big to fail, resolution frameworks for are hobbled by the mismatch between their global nature and the national scope of regulators. This …
European bank mergers: Domestic and cross-border. The European economy is recovering, and banks are thinking once more about mergers. This column demonstrates that, while cross-border mergers have been predicted before, most European bank mergers have consistently been domestic. Regulatory hurdles …
Database of Macroprudential Measures in the EU/EEA These macroprudential measures include those taken under Articles 124 and 164 of the Capital Requirements Regulation (CRR) to target systemic risks in the real estate sector, and macroprudential measures that are not harmonised …
ECB Macroprudential Database (MPDB) The Macroprudential Database (MPDB) is a comprehensive and harmonised dataset of indicators covering various sub-categories of indicators judged relevant for macroprudential analysis. The database focuses on the indicators that can be used to explain and predict …
European financial crises database The database on financial crises in European countries is an important step towards establishing common ground for macroprudential oversight and policymaking in the EU. The database provides precise chronological definitions of crisis periods to support the …
Completing Europe’s Banking Union means breaking the bank-sovereign vicious circle. Several euro area leaders have recently referred to the need to “complete the Banking Union”. This column, part of VoxEU’s Euro Area Reform debate, asks what would be required for …
The Global Debt Database (GDD) is the result of a multiyear investigative process that started with the October 2016 Fiscal Monitor. The dataset comprises total gross debt of the (private and public) nonfinancial sector for an unbalanced panel of 190 …
As use of macroprudential policy tools is growing, the IMF has initiated an annual survey on macroprudential policy with its membership. The resulting new database provides information on policy measures taken by IMF member countries as well as on the …
Financial globalisation and bank lending: The limits of domestic monetary policy The effectiveness of monetary policy in dictating banking activities is one of the keys to understanding how efficient monetary policy is in tuning the real economy. This column uses …
The ECB’s annual report on financial integration in Europe contributes to the advancement of the European financial integration process by analysing its development and the related policies. For the ECB, the market for a given set of financial instruments and/or …
The Global Financial Stability Report provides an assessment of the global financial system and markets, and addresses emerging market financing in a global context. It focuses on current market conditions, highlighting systemic issues that could pose a risk to financial …
FSB launches survey on infrastructure financing as part of its efforts to evaluate the impact of G20 regulatory reforms. Link: http://www.fsb.org/2018/03/fsb-launches-survey-on-infrastructure-financing-as-part-of-its-efforts-to-evaluate-the-impact-of-g20-regulatory-reforms/
The Macroprudential Policies Evaluation Database (MaPPED) provides details of macroprudential (or similar) policy actions taken in the European Union since 1995. MaPPED has been created to support the empirical assessment of the impact of macroprudential policies. Link: https://www.ecb.europa.eu/pub/research/working-papers/html/mapped.en.html
A new release of the interconnectedness newsletter is available for download. Download here: http://www.bankinglibrary.com/e/fdz/intbanklib/interconnectedness/2018Q2.pdf
The economics of supranational bank supervision. International cooperation on bank supervision is still rare. This column analyses data on supervisory cooperation among a global sample of countries between 1995 and 2013 to show that cooperation among bank supervisors is not …
The Chinese banking system: Much more than a domestic giant. Chinese banks have continued to expand rapidly both domestically and abroad. Together, they constitute the largest banking sector in the world by far. This column places the Chinese banking system …
