After the destructive impact of the global financial crisis of 2008, many believe that pre-crisis financial market regulation did not take the "big picture" of the system suffciently into account and, subsequently, financial supervision mainly "missed the forest for the trees". As a result, the...

There is growing acknowledgement among policymakers that climate change may give rise to potentially catastrophic financial risk and impact financial stability. This paper explores the specific features of climate-related financial risks (CRFR), drawing on a growing body of macrofinancial...

In this paper, we examine the impact of adopting macroprudential policies on bank risk taking and systemic risk. Using a difference-in-differences (DiD) design and a sample of 3,342 banks from 77 countries over the period 1997-2016, we find that macroprudential policy instruments mitigate bank...

What is the impact of policy interventions on the systemic risk of banks? To answer this question, we analyze a comprehensive sample that combines an original set of bank-specific bailout events with balance sheets of key affected and non-affected European banks between 2005 and 2014. We find a...

This paper presents the analysis underpinning the ESRB Recommendation on guidance on setting countercyclical buffer rates (ESRB 2014/1). The Recommendation is designed to help authorities tasked with setting the countercyclical capital buffer (CCB) to operationalise this new macroprudential...

The aim of this study is to assess the potential to introduce a positive neutral rate for the countercyclical capital buffer (nCCyB) at 0.5%, 1%, 1.5% and 2% in 20 EU countries over the period 2014Q4 up to 2023Q3. Prudential data at country-level was used to estimate the level of banks'...

We show that systemic risk in the banking sector breeds macroeconomic uncertainty. We develop a model of a production economy with a banking sector where financial constraints of banks can lead to disastrous banking panics. We find that a higher probability of a banking panic increases...

Since the Global Financial Crisis of 2008-2009, the importance of non-bank financial institutions in macroprudential management has increased significantly. Consequently, major countries and international financial institutions have been actively discussing and implementing macroprudential...