The bank collateral channel of monetary policy: evidence from securities losses
Monetary policy tightening generates valuation losses on banks’ securities portfolios, reducing the collateral available for interbank borrowing. Using detailed euro area data, we show that banks with...
View ArticleMonetary policy under multiple financing constraints
The fact that monetary policy tightening has stronger effects than easing is a longstanding puzzle in monetary economics. This article studies monetary transmission in settings where firms face...
View ArticleFinancial stability in the age of artificial intelligence: the role of...
Artificial intelligence (AI) is rapidly transforming financial decision-making. To explore the implications for financial stability we ran simulation-based experiments on two different AI...
View ArticleMessaging to a public with its own view on central bank confidence
We model central bank communication when there is disagreement between the markets and the central bank about the central bank’s confidence surrounding its point forecast. We show that such a...
View ArticleGreen supply chains at risk: measuring the true economic and environmental...
Our new methodology builds an inter-country input-output table that distinguishes green products from the rest, allowing us to assess vulnerabilities in green value chains. In a multi-country,...
View ArticleWhat regional data tell us about the euro area Phillips curve
Using regional data for 11 euro area countries from 1999 to 2023, instead of country-level data, we find that inflation still responds to economic slack, but this relationship is more modest and...
View ArticlePricing cascades – inflation in a networked economy
The post-pandemic inflation surge is often attributed to pent-up demand andopportunistic price hikes. In fact, it is better explained by the effects of theeconomy’s production network and...
View ArticleThe digital euro: awareness, adoption and household portfolios
Based on a series of novel experiments fielded within the ECB’s Consumer Expectations Survey, we provide evidence on the attitudes of euro area consumers towards a possible central bank digital...
View ArticleThe complex linkages between euro area insurers and sovereign bond markets
Euro area insurers manage several trillion euro in assets and take a long‑term investment perspective. To counteract the long period of low interest rates, they have shifted towards holding more...
View ArticleMonetary policy transmission through cross-selling banks
Banks trade off short-term losses on deposits against long-term profits from cross-selling other products to new depositors. This strategy is especially attractive when policy rates are low and future...
View ArticleDetails matter – how loan pricing affects monetary policy transmission in...
We present novel empirical evidence on lending practices across all euro area countries, using AnaCredit data covering nearly seven million new loans issued to non-financial corporations in 2022-23. We...
View ArticleRational inattention and information provision experiments
In surveys with information provision experiments, researchers can observe how people change beliefs, and sometimes also actions, after having been confronted with information. This article interprets...
View ArticleFrom words to deeds – incorporating climate risks into sovereign credit ratings
We investigate the impact of climate risks on sovereign credit ratings worldwide. Our analysis shows that higher temperature anomalies and more frequent natural disasters – measures of physical risk –...
View ArticleClimate change, firms and aggregate productivity
Our paper uses a general equilibrium framework to examine the effects of temperature on firm-level demand, productivity and input allocative efficiency. Using data from Italian firms and detailed...
View ArticlePrivate safe asset supply and financial instability
This article studies the supply of private safe assets by banks and its implications for financial stability. Banks originate loans and improve loan quality through hidden screening efforts. They can...
View ArticleWhy monetary policy should crack down harder during high inflation
The recent surge in inflation has led to a significant increase in the frequency of price changes, making prices more flexible. Conventional models assume a constant price change frequency, but in...
View ArticleEffects of monetary policy on labour income: the role of the employer
This article investigates how firms transmit monetary policy shocks to individual labour market outcomes at both the intensive and extensive margins. Using matched employer-employee administrative data...
View ArticleCritical input disruptions – mapping out the road to EU resilience
We study how disruptions to the supply of foreign critical inputs (FCIs) might affect value added at different levels of aggregation. FCIs are inputs primarily sourced from extra-EU countries with...
View ArticleHow tightening mortgage credit raises rents and increases inequality in the...
Housing affordability is at the centre of the political debate in many euro area countries. With steadily increasing rents and house prices still high relative to historical standards, many young...
View ArticleThe “doom loop” and default incentives
The “doom loop” or “sovereign-bank nexus” has been a key factor in the European debt crisis, driven by feedback between fiscal sustainability risks and financial stability. This Research Bulletin...
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