Information asymmetry between banks and enterprises in the credit market is essentially the microfoundation of financial risk generation. The frequent occurrence of corporate debt defaults, mainly due to the behavior of short-term debt for long-term use (hereinafter referred to as "SDLU"),...

The study investigates the influence of foreign institutional investment on the risk-return profile of firms. Corporate risk is analyzed as business risk and financial risk in this study. The impact of foreign institutional investor's (FII) holding on business and financial risk taking behavior...

This study employs a robust quantitative ex post facto research design to investigate the complex relationship between audit fees and earnings management. The financial information of 164 firms admitted to the Tehran Stock Exchange (TSE) was used from 2010 to 2019 (pre-COVID period) to achieve...

We develop a measure of overall financial risk in China by applying machine learning techniques to textual data. A pre-defined set of relevant newspaper articles is first selected using a specific constellation of risk-related keywords. Then, we employ topical modelling based on an unsupervised...

This paper provides an overview of recent analytical work1 conducted, under their own aegis, by experts from various European authorities and institutions in the field of crypto-asset monitoring. Currently, risks stemming from crypto-assets and the potential implications for central banking...

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 report focuses on the implications of the changed inflation environment for the ECB's monetary policy strategy, including the lessons learned from both the low inflation and high inflation periods, and the transition from one to the other. The starting point of the report is the outcome of...

Physical climate risks can have a large regional impact, which can influence mortgage loans' credit risk and should be priced by the lenders. Motivated by the relevance of climate change for financial intermediaries, our paper aims at analysing if physical climate risks are being reflected in...

We examine whether loan portfolio sectoral specialization provides informational advantages to banks, enabling better credit risk assessment. Using euro area credit register data, we compare probabilities of default assigned by specialized and non-specialized banks to the same borrowing firm...

We introduce a new Economic Distress Index (EDI), which incorporates information from all economic sectors as a device for real-time monitoring of financial stability risks in the euro area. Our approach is based on structural models of credit risk and incorporates market and balance sheet...

The European Union needs a single market for capital. Well-developed and integrated capital markets are necessary to support economic growth and resilience across the region, while offering benefits for businesses, households and financial stability. This paper examines the importance of the CMU...

We study the impact of cyclical systemic risks on banks' profitability in the euro area within a panel quantile regression model, with the ultimate goal to inform the calibration of the Countercyclical Capital buffer (CCyB). Compared to previous studies, we augment our model to control for...

Targeted longer-term refinancing operations (TLTROs) helped supporting bank lending to firms and to households in the course of the COVID-19 pandemic. The use of TLTRO funding for mortgage loans to households had explicitly not been included into the targeted loan categories of these schemes,...

Do sovereign credit ratings take into account physical and transition climate risks? This paper empirically addresses this question using a panel dataset that includes a large sample of countries over two decades. The analysis reveals that higher temperature anomalies and more frequent natural...

We investigate the interaction between monetary and macroprudential policy in affecting banks' lending and risk-taking behaviour using rich euro area credit registry data and exploiting a unique setting that combined a sharp and unexpected monetary tightening with a wave of macroprudential...

This research determines the contribution of Corporate Social Responsibility (CSR) to reducing financial risks and, consequently, to the sustainable development of companies in different sectors of the economy and at different phases of the economic cycle (using Russia as an example). The...

The global aviation sector underwent an unprecedented shock due to the COVID-19 pandemic, severely disrupting the passenger flows, flight operations, and revenues of Polish airports. In response, the government launched protective measures under the Anti-Crisis Shield and the COVID-19...

Aspiring to become the "Battery of Southeast Asia," the Lao People's Democratic Republic (Lao PDR) has rapidly expanded its electricity generation capacity to export power to neighbouring countries. However, this expansion introduces several long-term risks, including over-capacity, rising...

This structured keyword-based meta-analysis reviews the estimation of climate risk factors and their economic impact in the recent literature between 2009 and 2025. Via examining existing research we are able to extract core statements, critical success and risk factors, considered data sets,...

Chapter 1: Non-Bank Financial Intermediation: A background -- Chapter 2: Growth and Development of non-bank financial intermediation in emerging and developing economies -- Chapter 3: Measurement of non-bank financial intermediation -- Chapter 4: The impact of non-bank financial intermediation...

Liquidity is important for the stability of financial markets and the growth of national economies. However, the liquidity of financial markets may be influenced by country risk shocks through informational asymmetry, funding constraints, and portfolio rebalancing activities. Therefore, the...

Understanding asymmetric risks in macroeconomic variables is challenging. Most structural models used for policy analysis are linearised and therefore cannot generate asymmetries such as those documented in the empirical growth-at-risk (GaR) literature. This report examines how structural models...

Proposals to include adjustments such as brown penalising and green supporting factors in the prudential regulation are meant to direct bank lending towards environmentally friendly projects. However, such adjustments can blur the lines between prudential credit risk assessment and environmental...

In recent years, monetary policy and inflation considerations have been playing an increasingly important role for macroprudential authorities in their policy setting. This paper aims to assess the implications of high inflation and rising interest rates for macroprudential policy stance. The...

Stablecoin issuers can become subject to runs just like banks. This is because, in the absence of adequate regulation, issuers are incentivised to hold disproportionate amounts of high-yielding but illiquid assets in their reserve portfolios. The value of such reserve assets may be overly...

We study the sensitivity of the realised loss-given-default (LGD) to macroeconomic conditions by exploring Global Credit's confidential dataset on observed cash flows from defaulted loans. Given the prolonged duration of loan recovery, spanning several years, and the potential for macroeconomic...