The paradigm of self-stabilizing, equilibrating financial markets, respected for a long time, is seriously challenged by the recent financial crisis. Despite sophisticated bank risk management and comprehensive bank supervision interbank and corporate bond markets collapsed in 2007-2009. The...

This article makes an attempt to present the economics of credit securitisation in a non-technical way, starting from the description and the analysis of a typical securitisation transaction. The article sketches a theoretical explanation for why tranching, or non-proportional risk sharing,...

Communication with different audiences is a special challenge for central banks. Communication has to be considered in the context of the principles of transparency and accountability. Their interdependence stems from the mandate of the central bank and its position in society. The communication...

The adoption of a common currency by 12 European countries confronted monetary policy with unique challenges. In 1998, the ECB announced a monetary-policy strategy of how it aims to pursue price stability. Compared with other strategies, this has proved to be a superior alternative. Therefore,...