The primary driver of commercial bank failures during the Great Recession was exposure to the real estate sector, not aggregate funding strains. The main "toxic" exposure was credit to non-household real estate borrowers, not traditional home mortgages or agency-issued MBS. Private-label MBS...

This paper studies a banking model of maturity transformation in which regulatory arbitrage induces the coexistence of regulated commercial banks and unregulated shadow banks. We derive three main results: First, the relative size of the shadow banking sector determines the stability of the...

This paper assesses the trends of some main macroeconomic and macro-financial variables across different time horizons related to systemic banking crises. Specifically, by gradually shifting the observation horizon of the same statistical model across time, it observes how these variables are...

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....

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,...

This book is a collection of the proceedings of the ECB Legal Conference "From Monetary Union to Banking Union, on the way to Capital Markets Union: new opportunities for European integration", hosted by the European Central Bank on 1 and 2 September 2015. One of the main objectives of this...