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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,...
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Complementing Europe's bank-based system with deeper capital markets and more cross-border financial integration … opportunity to shape a stable and cost-efficient financial system. In contrast, late action could mean that Europe loses out to … foreign competitors and misses an opportunity to improve financial intermediation in Europe. …
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This Policy Contribution, based on a note written for the Bundestag EU Committee, explores the possible consequences of a no-deal Brexit for the European Union and assesses preparations on the EU side. It also provides guidance on the optimal strategy for the EU, depending on the choices made by...
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