We study the vulnerability of 130 banks directly supervised by the European Central Bank's Single Supervisory Mechanism … healthier segments of the economy. But instead of emphasising bank recapitalisation, as in past years, we believe the task is to …

in modern monetary and financial systems, namely central bank collateral frameworks. Their importance can be understood … by the observation that the money at the core of these systems, central bank money, is injected into the economy on terms … on financial markets and the wider economy. They can, for example, bias the private provision of real liquidity and …

Liquidity stress constitutes an ongoing threat to financial stability in the banking sector. A bank that manages its … construct probabilistic classifiers that estimate the probability that a bank faces liquidity stress. The classifiers are … liquidity inadequately might find itself unable to meet its payment obligations. These liquidity issues, in turn, can negatively …