This paper examines the impact of fintech adoption and financial inclusion on financial stability in selected countries. Using panel data from 30 countries spanning 2011-2024, the study employs an empirical strategy based on Two-Way Fixed Effects, a dynamic two-step System GMM estimator, and...

Banks use synthetic risk transfers (SRTs) to offload potential losses in their loan portfolios to non-bank investors while retaining the loans on their balance sheets. We investigate this trillion-euro market using transaction-level data from the euro area, the largest SRT market, and highlight...

The World Bank asserts that reducing extreme poverty and achieving shared prosperity are both made possible through financial inclusion. Digital finance may enhance financial stability, thereby supporting more inclusive and sustainable economic growth. Despite its potential benefits, the link...

I develop a framework analyzing how artificial intelligence (AI) reshapes monetary policy through three interrelated channels: cyclical transmission, structural transition, and financial stability. In the short run, AI can alter inflation dynamics by changing how supply and demand disturbances...

Climate change has emerged as one of the defining risks in recent years. These risks are associated with economic losses and, ultimately, the stability of the financial system. This study examines the impact of climate change on financial stability in Namibia using quarterly data spanning from...

We propose a quantitative framework to track systemic risk arising from cyber vulnerabilities of the U.S. financial system. Synthesizing financial, economic, cyber, and network data that covers thousands of financial institutions and technological firms, we develop an index that tracks...

In essence, the currently large stablecoins are electronic money issued by narrow balance sheet vehicles into a distributed ledger (or a "programmable platform"). Many believe that they will have significant success as a new form of money. Members of the current US administration expect that US...

In essence, the currently large stablecoins are electronic money issued by narrow balance sheet vehicles into a distributed ledger (or a "programmable platform"). Many believe that they will have significant success as a new form of money. Members of the current US administration expect that US...

This study applies the Log-Periodic Power-Law (LPPL) framework to three major equity markets-Mexico (IPC), Brazil (IBOVESPA), and the United States (NYSE Composite)-using daily closes from 8 November 1991-30 January 2025 for IPC and NYSE, and 3 May 1993-30 January 2025 for IBOVESPA. Multi-window...

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...

This paper examines the relevance of banks' exposure to climate transition risk in the interbank lending market. Using transaction-level data on repo agreements, we first establish that banks with higher exposure to transition risk face significantly higher borrowing costs. This premium is a...

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...

We study how physical climate risk shapes bank lending activity and credit quality by combining high-resolution Copernicus flood geospatial maps with loan-level AnaCredit data. We exploit four major European floods (2021-2024) in a spatial regression discontinuity design comparing firms located...

Does artificial intelligence (AI) pose a threat to financial stability? We study AI investor behavior, specifically Q-learning and large language model (LLM) investors, in a mutual fund redemption problem with economic and strategic uncertainty. Different AI architectures generate systematically...

Does the preferential tax treatment of debt over equity cause banks to increase their leverage? We construct a novel dataset tracing the evolution of the debt tax shield for banks in advanced economies from 1870 to 2020. Exploiting variation from nearly all changes in banking-sector tax shields...

We examine whether banks incorporate firm-level biodiversity risk into their lending decisions. Using a large sample of syndicated loans matched to firm-level biodiversity risk measures, we document that borrowers with higher biodiversity risk face significantly higher loan spreads. Evidence on...

This paper investigates the presence and timing of explosive price dynamics in major listed real estate markets over the period 04 January 2011 - 11 February 2026. The analysis focuses on four benchmark indices: the FTSE EPRA Nareit Developed Europe Index, the FTSE Nareit All Equity REITs Index...

Global financial stability is critical for sustainable economic growth. The post-global financial crisis reform program strengthened the banking system, and, despite several shocks, the global economy and financial system appear relatively resilient. But vulnerabilities persist in banks, are...

How does global banking impact financial stability and the real economy, particularly in emerging market economies? This paper revisits this question through the lens of new data and recent empirical findings in the banking literature. Considering this evidence, we illustrate how global banks...

This paper investigates the financial stability implications of introducing a central bank digital currency (CBDC) using an extension of the classical Diamond and Dybvig (1983) model. We analyze two key concerns associated with CBDCs: their potential to foster disintermediation of commercial...

This paper examines the growing impacts of climate change in the US homeowner's insurance industry. As climate change-driven weather extremes and natural disasters have accelerated in their frequency and severity, they have inflicted increasingly more residential property damage and destruction,...

Indonesia's financial system is bank-centric, with banks managing approximately 78% of the nation's financial assets; therefore, the effectiveness of monetary policy transmission depends on banks' responsiveness to the central bank's interest rate policy (the BI Rate). However, a policy-relevant...

The Objective of this study is to explore a suitable framework of Central Bank Digital Currency for Pakistan according to its unique socio-economic needs through Delphi and Analytical Network Processing Method. This study has used a mixed-method approach combining two distinct techniques to...

The Global Financial Crisis of 2007-2009 moved research on household debt and its aggregate implications to the forefront of macroeconomics. In this review, we offer a synthesis of this large body of both empirical and theoretical research, and an overview of the most important themes for future...

Digitalization of the global economy, catalysed by advancements in blockchain technology and the rise of cryptocurrencies, has led to a paradigm shift in the monetary landscape. Central Bank Digital Currencies (CBDCs) have emerged as a transformative force with the potential to revolutionize...

This study evaluates the credit risk of sustainable loans in a preferential capital requirement programme. We utilise loanlevel data from a uniquely implemented programme from Hungary, applying logistic regressions and survival analysis techniques. We observe a significantly reduced credit risk...

In times of stress, if the potential demand from asset managers for market liquidity approaches or exceeds dealers' ability to intermediate, it could lead to a precautionary but disruptive dash for cash and may lead central banks to intervene. If the likelihood of such a dash for cash increases...

Conventional measures of bank solvency fail to account for the unique liquidity risks posed by deposits. Using public regulatory data, we develop a novel measure, economic capital, that jointly quantifies the impact of credit, liquidity, and market risk on bank solvency. We validate that...

This study quantifies the impact of write-down equity (WDE) on bank stability and risk-taking incentives under ambiguity aversion. We decompose payoffs to bank stakeholders into sets of barrier options and present closed-form solutions for their prices. Our paper shows that: first, write-down...

As TLTRO programs provide a direct incentive to increase lending, investigating the level of prudence applied by banks in making lending decisions is of high relevance. Relying on loan-level data, I evaluate the riskiness of lending by applying estimations in a difference-in-differences setting...