In a number of countries a substantial proportion of mortgage loans is denominated in foreign currency. In this paper we demonstrate how their presence affects economic policy and agents' welfare. To this end we construct a small open economy model with housing loans denominated in domestic or...

We develop a dynamic general equilibrium model for the positive and normative analysis of macroprudential policies. Optimizing financial intermediaries allocate their scarce net worth together with funds raised from saving households across two lending activities, mortgage and corporate lending....

Small open economies within a monetary union have a limited range of stabilisation tools, as area-wide nominal interest and exchange rates do not respond to country-specific shocks. Such limitations imply that imbalances can be difficult to resolve. We assess the role that government spending...

This European Central Bank (ECB) publication - Stress Test Analytics for Macroprudential Purposes in the euro area (STAMP€) - offers a suite of analytical tools for those interested in stress-testing frameworks and has been developed by ECB staff over the past few years.

Macroprudential policy can comprise a broad range of issues and topics. This is clearly reflected in the second issue of the ECB's Macroprudential Bulletin. The Bulletin starts with the macroprudential effects of the EU-wide bank stress testing exercise. The first chapter of the Bulletin...

Since the financial crisis, the concept of macroprudential policy has progressively gained ground. The aim of macroprudential policy is to increase the resilience of individual financial institutions and of the financial system as a whole. It is also used to smooth out the financial cycle,...

The Governing Council of the European Central Bank (ECB) is releasing the following statement following the meeting of its Macroprudential Forum on 19 June 2024. Since the Governing Council statement issued in November 2022, many countries participating in European banking supervision have...

The Governing Council of the European Central Bank (ECB) is releasing the following statement following the meeting of its Macroprudential Forum on 19 June 2024. Since the Governing Council statement issued in November 2022, many countries participating in European banking supervision have...