Latent fragility: Conditioning banks' joint probability of default on the financial cycle
Journal of International Money and Finance, 146, 103107
Why so many crises happen when we know why they happen and how to prevent them
Financial crises are not complicated, and many claim to know why they happen and how to prevent them. Why then do they happen with such alarming...
Correlation between upstreamness and downstreamness in random global value chains
This paper is concerned with upstreamness and downstreamness of industries and countries in global value chains. Upstreamness and downstreamness...
Upstreamness and downstreamness in input-output analysis from local and aggregate information
Ranking sectors and countries within global value chains is of paramount importance to estimate risks and forecast growth in large economies. However...
How the financial authorities can take advantage of artificial intelligence
Artificial intelligence will both be of considerable help to the financial authorities and bring new challenges. This column argues the authorities...
Chinese Debt Capital Markets - An Emerging Global Market with Chinese Characteristics
With the deepening of China's reform and opening up, and the sustained development of the Chinese economy, the Chinese bond market has become an...
When risk models hallucinate
Risk model hallucination happens when models are forced to forecast the likelihood of extreme events in cases where they have not been trained with...
Dynamic industry uncertainty networks and the business cycle
Journal of Economic Dynamics and Control, 159, 104793
How AI can undermine financial stability
As artificial intelligence makes inroads into the financial system, it exacerbates existing channels of instability and creates new ones. This column...
The calming of short-term market fear and its long-term consequences: The central banks’ dilemma
We study the short-term effects and long-term consequences of Fed crisis interventions on market fears — the risk perception of large asset price...
An Unconventional FX Tail Risk Story
We examine how the tail risk of currency returns over the past 20 years were impacted by central bank (monetary and liquidity) measures across the...
On the use of artificial intelligence in financial regulations and the impact on financial stability
As the financial authorities increase their use of artificial intelligence (AI), micro regulations, such as consumer protection and routine banking...
Artificial intelligence and financial stability
The use of artificial intelligence in the private sector is accelerating, and the financial authorities have no choice but to follow if they are to...
Stress-testing the banking system: what lies ahead?
Pedro Duarte Neves says stress tests must evolve to capture systemic, liquidity and cyber risks.
Stylised facts on the effectiveness of macroprudential policy
This policy note summarises the main empirical findings on the effectiveness of macroprudential policy: macroprudential policy contributes to a...