Insurance companies play an important role in supporting economic activity. But insurers are exposed to a number of risks and can become distressed or fail. This article considers a number of channels through which insurance companies could have adverse effects on financial stability, including:...

This paper studies the long-run relationship between consumption, asset wealth and income in Germany, based on data from 1980 to 2003. While earlier studies mostly for the Anglo-Saxon economies have generally documented that departures of these three variables from their common trend signal...

Equilibrium exchange rate theories (FEER, BEER and NATREX) make the assumption that the Real Equilibrium Exchange Rate (RER) is independent from internal equilibrium and economic policies. We develop a model in which economic policies depend on the minimisation of an intertemporal loss function...

In March 2021, the default of Archegos, a US family office, led to large losses for some global banks. Archegos was able to accumulate large exposures to and leverage on equities by entering into derivatives transactions with bank counterparties. When the price of the underlying stocks started...

The article aims at overcoming the internal contradictions of market efficiency as defined by Fama (1965) by providing three definitions of market efficiency: fundamental efficiency, macroeconomic efficiency and speculative efficiency. Applied to the foreign exchange market, these definitions...