We study how short-term interest rate volatility affects the transmission of monetary policy. To identify exogenous changes in volatility, we exploit the pronounced heteroskedasticity visible in the time-series of euro area short-term rates over the past two and a half decades. Interacting the...

This paper analyzes the private production of safe assets and its implications for financial stability. Financial intermediaries (FIs) originate loans, exert hidden effort to improve loan quality, and create safe assets by issuing debt backed by the safe payments from (i) their own loans and...

This paper finds that an additional percentage point in the ratio of Common Equity Tier 1 (CET1) capital to risk-weighted assets is associated with an increase in the Weighted Average Cost of Capital (WACC) of Chilean banks by a maximum of only 11.7 basis points. This result is found by...

This research investigated the behavior related to compliance with information security policy in the Yemeni banking sector by using the protection motivation theory (PMT). While PMT has been a prominent framework in understanding information security compliance, previous research has produced...

This article examines U.S. Treasury securities market functioning from the global financial crisis (GFC) through the Covid-19 pandemic given the ensuing market developments and associated policy responses. We describe the factors that have affected intermediaries, including regulatory changes,...

Despite its growing success, open banking (OB) struggles to present a coherent identity. Indeed, despite its widespread adoption around the world, various models can be identified based on rationales, the nature of data-sharing obligations, and the standardisation process. Against this...

Export credit agencies (ECAs) play an important role in international trade by providing derisking instruments that function as public assistance to companies engaging in international commerce. As the geopolitical environment has become more fraught, this support has become ever more important....

National Promotional Banks and Institutions (NPBIs) are state-owned or partially state-owned financial entities mandated to pursue specific socioeconomic objectives. Their role has been widely analysed in the literature, particularly in relation to sustainable development and addressing market...

A sound, resilient banking sector that efficiently allocates capital is essential for EU competitiveness. To achieve it, the EU should primarily focus on completing the banking union. It should also simplify capital and other loss-absorbency requirements, and pool decision-making on...

We ask whether imposing fees on redeeming investors can prevent runs on money market mutual funds (MMFs) and related intermediation arrangements. We first show that imposing a fee only in extraordinary times often leaves the fund susceptible to a preemptive run where investors rush to redeem...

This paper studies how banks manage their equity capital in the short run, particularly during periods of distress, based on Basel III monitoring data. The findings challenge the conventional assumption that bank capital is largely exogenous in the short run, meaning that banks cannot adjust...

This paper deals with the effectiveness of crisis management measures used by national authorities to tackle a systemic banking crisis. Quarterly panel dataset of 69 countries over the time span 1970 to 2023 was created and a total of 54 crisis periods were examined based on the identification...

One defining feature of financial crises, evident in U.S. and international data, is asymmetric bank distress-concentrated losses on a subset of banks. This paper proposes a model in which shocks to borrowers' productivity dispersion lead to asymmetric bank losses. The framework exhibits a "bank...

The objective of the current work is to estimate to what extent support measures of the Bank of Russia and the Government of the Russian Federation promoted financial stability of banks and the financial market overall so to sustain lending economy-wide during the crisis periods of 2014, 2020,...

This paper proposes an alternative solution to the problem related to the risk that banks incur in the protection of deposits. This solution lies in the use by banks of contingent convertible leasing contracts to face financial distress situations by solidifying their own funds and thus...

A large literature at the intersection of economics and finance offers prescriptions for regulating banks to increase financial stability. This literature abstracts from the discretion that accounting standards give banks over financial reporting, creating a gap between the information assumed...

Monetary and Capital Markets (MCM) department delivered a hybrid technical assistance (TA) mission to assist the Bangko Sentral ng Pilipinas (BSP) in developing a supervisory framework for operational resilience. An earlier mission in 2022 assisted BSP to develop a regulatory framework for...

This technical note focuses on regulation and supervision of less significant institutions as part of the Slovak Republic's Financial Sector Assessment Program. Národná banka Slovenska's (NBS) supervisory approach focuses on Less Significant Institution (LSI) risks and vulnerabilities however...

How does environmental, social and governance regulation of banks affect capital provision to the sustainability transition? As ambitious sustainability targets face funding challenges, the financial sector is tasked with channeling more private capital into sustainable investments. However,...

ECB Banking Supervision has concluded its 2025 solvency stress test for euro area significant institutions. A total of 51 significant institutions directly supervised by the ECB took part in the EU-wide stress test coordinated by the European Banking Authority (EBA) in cooperation with the...

In this paper, we analyze the competition in the Colombian banking sector using bank-level monthly balance sheet information. We estimate the changes in measures of market power due to the exogenous introduction of a liquidity regulation. Our results suggest that introducing a net stable funding...

This paper examines how microprudential policy affects income inequality, and whether and how the effect of macroprudential policy on income inequality depends on the stance of microprudential policy. The dataset covers 70 countries over the period 1996-2013. Applying the system GMM estimation...

For the past hundred years or more, payments have been primarily associated with banking, and banking as we know it today-being the result of many centuries of evolution-features a bundling of (at least) three main lines of business: lending, deposit-taking, and payment services. In the past 15...