The recent wave of financial innovation, particularly innovation related to the application of information and communication technologies, poses a serious challenge to the financial industry's business model in both its banking and non-banking components. It has already revolutionised financial...

This report aims to analyse euro area energy markets and the impact of energy price changes on the macroeconomy from a monetary policy perspective. The core task of the report is to analyse the impact of energy price developments on output and consumer prices. Nevertheless, understanding the...

This policy report analyzes one aspect of the sovereign-bank nexus: the feedback effects between banks and sovereigns derived from the holdings of sovereign debt in domestic banks. We study how this relationship evolved during the European debt crisis and how it responded to the implementation...

The euro area bank lending survey (BLS) serves as an important tool in the analysis of bank lending conditions in the euro area and across euro area countries, providing otherwise unobservable qualitative information on bank loan demand and supply from/to euro area enterprises and households....

The cost of equity for banks equates to the compensation that market participants demand for investing in and holding banks' equity, and has important implications for the transmission of monetary policy and for financial stability. Notwithstanding its importance, the cost of equity is...

Since the European Central Bank's (ECB's) 2003 strategy review, the importance of macro-financial amplification channels for monetary policy has increasingly gained recognition. This paper takes stock of this evolution and discusses the desirability of further incremental enhancements in the...

Since the European Central Bank’s (ECB’s) 2003 strategy review, the importance of macro-financial amplification channels for monetary policy has increasingly gained recognition. This paper takes stock of this evolution and discusses the desirability of further incremental enhancements in the...

1) Stability Oriented Monetary and Prudential Policies in EU Accession Countries, by Michael C. Bonello 2) Ensuring Financial Stability: Global and European Perspectives, by Fabrizio Saccomanni 3) Foreign Bank Ownership: A Bonus or Threat for Financial Stability? by Claudia M. Buch, Jörn...

As the euro area has a predominantly bank-based financial system, changes in the composition and strength of banks' balance sheets can have very sizeable implications for the transmission of monetary policy. This paper provides an overview of developments in banks' balance sheets, profitability...

The paper first reviews the main drivers of the growth and real convergence process in central, eastern and south-eastern Europe (CESEE) since 2000 and assesses the key macro-financial strengths and vulnerabilities of the region at the beginning of the global economic and financial crisis. The...