An important policy discussion is ongoing in Denmark and Sweden on joining the Euro-pean Union's banking union. Joining would bring pros and cons. A major issue is the supervi-sion and resolution at the national level of large banks with a Scandinavian footprint. It is not evident that Denmark...

The euro became an international currency when it was created two decades ago. However, the euro's internationalisation peaked as early as 2005 and it was never comparable to the US dollar. Its international status declined with the euro crisis. Faced with a US administration willing to use its...

The International Monetary Fund (IMF) played a ground-breaking role in understanding the financial-sector dynamics of the euro-area crisis. It was the first public authority, and one of the first more generally, to acknowledge the role of the bank-sovereign vicious circle as the central driver...

Quantitative easing (QE) affects banks’ profitability in three main ways. First, as QE drives up bond prices, banks holding such bonds see their balance sheets strengthened. Second, QE reduces long-term yields and thereby reduces term spreads. With this, the lending-deposit ratio spread falls,...

Europeans like to believe the European Union has the collective economic size and capacity to determine its own economic destiny. But the behaviour of others global powers is increasingly calling this ability into question. China and the United States, especially, do not separate economic...

We study whether and to what extent EU countries implement recommendations on macroeconomic imbalances given by the EU in the so-called European Semester. We assess how recommendations have evolved since 2013, based on a new database. We also study how EU recommendations on addressing...

The deep involvement of a number of euro-area banking groups in central and southeastern Europe has benefi tted the host countries and has strengthened the resilience of those banking groups. But this integration has become less close because of post-fi nancial crisis national rules that require...

Southern European euro-area members suffered from unsustainable developments after they joined the euro in 1999 and up to 2008, and have had great difficulties since. Inadequate national policies were the main causes of these unsustainable developments, but euro membership played a role before...

The European Central Bank’s November 2019 Financial Stability Review highlighted the risks to growth in an environment of global uncertainty. It also discusses sovereign-debt concerns in case interest rates increase, and risks arising from household and corporate debt. It assesses the risks...

After reaching historically low levels in the first half of 2016, European long-term sovereign yields experienced a notable increase in the second half of 2016 and at the beginning of 2017, before stabilising in the last few months. The nominal long-term interest rate can be decomposed into the...