The changing landscape for European banks influences the future of sovereign borrowing and vice versa. The fates of banks and sovereigns are intertwined, including by toxic feed-back loops between them. The study suggests considering four policy principles or guidelines to weaken the toxic...

This work examines the impacts which the Covid-19 pandemic brought to the stability of the European financial sector. Lockdowns, businesses unable to operate and uncertainty about how the pandemic would evolve fueled a sharp recession. From the lessons learned in the global financial crises and...