The contribution of financial and non-financial risks to the overall level of risk in the system depends on the current state of the EU banking system (which, in the aggregate and compared with banking sectors in other major advanced economies, cannot be characterised as strong) and how...

In this report we outline how a formulating normative measure of macroprudential policy stance requires a framework containing objectives, tools and transmission mechanisms. To complement the currently prevailing narrative approach, we apply lessons from the monetary policy to macroprudential...

A European banking union is necessary to ensure the stability of the European financial system. This paper assesses the EU Commission's proposals for legislation to create a banking union in Europe. The EU Commission's proposal for a regulation creating a single supervisory mechanism is strongly...

The European macro-prudential policy framework operates at two levels. First, the ESRB has a legal responsibility for macro-prudential oversight in the EU. Second, various national and EU authorities have responsibility for the implementation of macro-prudential policy. The creation of a...

Banking has grown too much in Europe - in three senses. First, the European banking system has reached a size where its contribution to real economic growth is likely to be nil or negative. Second, the European financial structure is biased towards banks (rather than securities markets), which...

This report elucidates the risk channels for EU economies associated with international financial integration and provides an overview of the macroprudential policy options that are available to address these risks. It builds on the main insights from the rich academic literature developed...

This report presents a long-term view of the evolution of financing of EU non-financial corporations (NFCs) in recent decades. It finds a decline in NFC leverage since at least 2008, and across countries, size categories and industries. It also documents a growing role of non-bank financial...