The incorporation of new technologies to financial activities implies challenges and opportunities to financial authorities. They are reacting to the unavoidable trend towards digitalization of financial activities with the objective of preserving stable and efficient payment and financial...

This paper provides a rationale for the macro-prudential regulation of insurance companies, where capital requirements increase in their contribution to systemic risk. In the absence of systemic risk, the formal model in this paper predicts that optimal regulation may be implemented by capital...

Using randomized control trials (RCTs) applied over time in different countries, we study how the economic environment affects how agents learn from new information. We show that as inflation has recently risen in advanced economies, both households and firms have become more attentive and...

Should central banks be in charge of micro-prudential as well as of macro-prudential supervision? This paper uses a formal model to analyze that question, and thereby informs the current reform efforts on the fields of banking supervision. Our main finding is that, while there are good reasons...

This paper presents a model of soft budget constraints (SBC) in a bank lending relationship, emphasizing the role of institutions in shaping the SBC phenomena. The model allows two types of SBC to emerge according to specific constellations of parameters: the SBC as a dynamic commitment problem...

Using randomized control trials (RCTs) applied over time in different countries, we study how the economic environment affects how agents learn from new information. We show that as inflation has recently risen in advanced economies, both households and firms have become more attentive and...