The bank collateral channel of monetary policy: Evidence from securities losses
Sharp increases in interest rates can reduce the market value of banks’ securities holdings and threaten financial stability. Using euro area data for 2022-2023, this
A sober look at the case for common European Union debt
More EU debt will not lower public borrowing costs or deepen markets without fiscal-union features, permanent issuance and credible fiscal backstops. Proposals for common European
How large current account imbalances unwind: Evidence from historical adjustment episodes
Global imbalances are back in the policy debate. This column examines 70 current account adjustment episodes across 51 economies from 1980 to 2024 to discover
Hedging interest rate risk when it matters: Evidence from Italian banks
Valuation losses can build quickly in response to higher interest rates, as demonstrated by the collapse of Silicon Valley Bank. This column shows that Italian
Financial stability in the age of artificial intelligence: The role of algorithmic architecture
Artificial intelligence is rapidly transforming financial decision-making. This column explores the implications for financial stability using simulation-based experiments on two different AI architectures. Q-learning algorithms,
Foreign currency funding risk and global financial stability
The Credit Suisse crisis in 2023 demonstrated that foreign currency funding vulnerabilities remain material even in advanced, well-regulated financial systems. This column introduces a new
Banking on nonbanks
Nonbank financial institutions play a central role in global credit markets, raising concerns about regulatory arbitrage, financial stability, and the effectiveness of macroprudential policy. While
Stablecoins and the exorbitant privilege of money creation
Payment stablecoins are set to become an important financial instrument. Their impact on the financial system will depend on whether the issuers can purchase assets
The Bank of England’s capital mistake?
On 2 December 2025, the Bank of England’s Financial Policy Committee announced it would be lowering the capital requirement for UK banks. This column argues
How resilient is Russia’s economy after four years of war?
Resilience in Russia’s 2022–25 economy is fading as war spending slows growth, entrenches inflation and amplifies structural fragilities. In 2022-2025 the Russian economy demonstrated resilience
