We argue that the rapid asset growth of nonbank financial intermediaries (NBFIs) relative to banks is the outcome of transformations of risks between banks and NBFIs that increase the interconnectedness of the two sectors. These transformations are consistent with avoiding tighter, post-GFC bank...

This paper applies the Growth-at-Risk (GaR) framework to assess downside risks to euro area GDP growth, and it examines its usefulness for stress testing. Supervisory stress-test scenarios are often criticized for being either too mild or implausibly severe, raising questions about calibration....

This paper introduces Bai-Perron structural break detection combined with negative binomial regression to model overdispersed U.S. IPO count data. Using monthly data from 1995 to 2024, we identify five breaks that partition IPO activity into six distinct regimes, each with fundamentally...

The financial crisis of 2007-2008 highlighted the risks that liquidity spirals pose to financial stability. We introduce a novel method for studying liquidity spirals and use this method to identify spirals before stock prices plummet and funding markets lock up. We show that liquidity spirals...

This paper studies the international macro-financial implications of U.S. dollar-backed payment stablecoins. These digital assets create a new global safe asset channel that links private money creation and global payment needs directly to U.S. public debt. By reshaping the demand for safe...

This study examines the systemic operational risk in Morocco's banking sector using a Panel VAR model based on data from three banks over ten years. The model includes real GDP, interbank rate (TMP), and bank credit, alongside indicators of operational, credit, and liquidity risks. The Impulse...

During World War II, French Moroccan troops performed numerous acts of (sexual) violence against the Italian population, known in Italy as the Marocchinate. We demonstrate that these events led to contagion in prejudice: They triggered a pronounced shift to the far right following the recent...

This study examines how geographic distance to Vietnam's centralized securities regulator-the State Securities Commission (SSC)-influences firm-level stock price crash risk. In emerging markets characterized by weak governance, corruption, and political connections, distance can erode monitoring...

As a cornerstone of the modern financial safety net, the Lender of Last Resort (LOLR) is essential in mitigating liquidity crises and containing financial contagion. However, during periods of economic stability, risk-taking incentives in the banking sector may undermine its effectiveness. Using...

We develop a novel sentiment measure derived from survey data to empirically vali date the Minsky-Kindleberger view on financial crises. Using survey data from multiple countries, we decompose beliefs into components explained by public information that are orthogonal to optimal machine beliefs,...

Home to more than 1 billion people, the 39 emerging market and developing economies (EMDEs) classified as being in fragile and conflict-affected situations (FCS) are plagued by instability and weak institutions. This hinders their ability to attain the robust, sustained economic growth needed...

This World Bank report highlights the benefits of investing in resilient urban sanitation systems for people, economic growth, and the planet. The report presents a suite of policy, institutional, regulatory, and financing (PIRF) recommendations, and outlines actions that cities and countries...

This paper examines how social movements influenced Greece's macroeconomic adjustment during the financial crisis and austerity period (2010-2015). The purpose is to identify the channels through which mobilizations-anti-austerity protests, general strikes, youth actions, and solidarity...

This paper studies the role of banking supervision in anticipating, monitoring, and disciplining failing banks. We document that supervisors anticipate most bank failures with a high degree of accuracy. Supervisors play an important role in requiring troubled banks to recognize losses, taking...

This paper proposes a new framework for measuring systemic financial risk, which combines the Diebold and Yilmaz spillover index model, complex network, and dimensionality reduction method. This framework simulates the process of risk contagion through network dynamics, accounting for the...

This study examines the impact of financial inclusion on bank stability across 36 emerging economies, utilizing bank-level data from over 1,500 commercial banks spanning the period 2004 to 2023. Despite the recognized benefits of financial inclusion, its influence on banking stability remains...

This study investigates the effect of the recent Ghanaian banking crisis on the country's ongoing sovereign debt crisis. An Autoregressive Distributed Lag Model (ARDL) is adopted to estimate the immediate effects of Ghana's banking crisis on public debt levels using secondary data spanning the...

This study compares the resilience of optimal portfolios constructed using participation stocks (i.e., sharia-compliant stocks) to that of conventional stocks on Borsa Istanbul between 2011 and 2024 for three periods when a stock market crisis occurred. The three crises are related to Gezi Park,...

In response to the scarce evidence regarding herd behaviour in emerging and frontier debt markets, this paper investigates the potential mispricing of MENA sovereign risk. We explore whether this mispricing results from international investor herding, where MENA debt assets are collectively...

This study examines the effects of Islamic finance on the resilience of Cameroonian SMEs during the COVID-19 pandemic and the Russia-Ukraine war. Analyzing data from 1358 SMEs using a multivariate probit model, we find that Islamic finance significantly boosts strategies like online marketing,...

In this paper, we analyse data from 493 listed banks across 28 countries to investigate the impact and mechanisms through which banks' derivatives holdings influence systemic risk. Our empirical results indicate that banks' derivatives holdings significantly increase systemic risk. Regarding the...

The Korean shipping industry, which had been striving to recover from the Asian Financial Crisis, underwent significant quantitative expansion between 2004 and 2008. This growth was largely fueled by the so-called "China Effect," which generated a global shipping boom, during which an average of...

Motivated by the dominant role of the US dollar, we explore how monetary policy (MP) shocks in the United States can affect a small open economy through the expectation channel. We combine data from a panel survey of firms' expectations in Uruguay with granular information about firms' debt...