How does a shock to the liquidity of bank assets affect credit supply, cross-border lending, and real activity at the firm level? We exploit that, in 2007, the European Central Bank replaced national collateral frameworks by a single list. This collateral framework shock added loans to...

This paper studies the effects of harmonizing collateral policy in a monetary union. In 2007, the European Central Bank replaced national collateral lists with a single list specifying which assets euro area banks can pledge as collateral. Banks holding newly eligible assets experience a...

Können Zentralbanken einen wirksamen Beitrag zur Finanzmarktintegration leisten? Im Januar 2007 hat die Europäische Zentralbank (EZB) erstmals eine einheitliche Liste der Vermögenswerte, die Banken als Sicherheiten verpfänden können, eingeführt und dabei auch grenzüberschreitende...

Der Klimawandel wird einen tiefgreifenden Einfluss sowohl auf die europäische als auch die globale Wirtschaft haben. Bei der Frage nach dem Handlungsbedarf für Zentralbanken wie die EZB ist unstrittig, dass Zentralbanken notwendige Schritte zu Sicherstellung von Preis- und Finanzstabilität im...

We study the preferential treatment of green bonds in the central bank collateral framework as an environmental policy instrument within a DSGE model with environmental and financial frictions. In the model, green and carbon-emitting conventional firms issue defaultable corporate bonds to banks...

Central banks implement monetary policy by extending credit to banks, for example via standing facilities or long-term refinancing operations. In addition to setting policy rates, central banks also specify in their collateral framework which financial assets banks can pledge to obtain central...

How does convenience yield interact with sovereign risk and the supply of government bonds? We propose a model of sovereign debt and default in which convenience yield arises because investors are able to pledge government bonds as collateral on financial markets. Convenience yield is dependent...

This paper proposes a quantitative multi-sector DSGE model with bank failure and firm default to study the interactions between bank regulation and climate policy. Households value the liquidity of deposits, which are protected by deposit insurance. Banks collect deposits and issue equity to...

Does a shift to ambitious climate policy increase financial fragility? In this paper, we develop a quantitative macroeconomic model with carbon taxes and endogenous financial crises to study such "Climate Minsky Moments". By reducing asset returns, an accelerated transition to net zero exerts...

This paper shows that firm credit constraints impair climate policy. Empirically, firms with tighter credit constraints, measured by their distanceto-default, exhibit a relatively smaller emission reduction after a carbon tax increase. We incorporate this channel into a quantitative DSGE model...