This paper examines the channels via which climate change and policies to mitigate it could affect a central bank's ability to meet its monetary and financial stability objectives. We argue that two types of risks are particularly relevant for central banks. First, a weather-related natural...

Inadequate public disclosure by banks contributed to the financial crisis. This is because investors, unable to judge the risks that banks are bearing, withdraw lending in times of systemic stress. This article presents quantitative indices which allow for the comparison of disclosure between...

We investigate the impact that the publication of the Bank of England's Financial Stability Report (FSR) has on the stock returns and credit default swap spreads of UK financial institutions. Examining a sample of 73 UK-listed banks and other financial institutions, we find that publication of...

This paper builds a simple model to look at the effect of securitisation on the banking system. In this paper we build a model of asymmetric information in the secondary market for loans and a 'lemons' problem faced by uninformed agents who buy these loans. We show how certain conditions can...

When considering the issue of bank rescues there is a tradeoff between crisis prevention and moral hazard. The literature has so far concentrated on the two extreme, and heavily criticised, cases of no LOLR and the unconstrained LOLR. This paper considers an intermediate case, where the limited...

Since the 2007–09 crisis, tougher bank liquidity regulation has been imposed which aims to ensure banks can survive a severe funding stress. Critics of this regulation suggest that it raises the cost of maturity transformation and reduces productive lending. In this paper we build a bank run...

Over the last decade, banks around the world have been confronted with substantialmisconduct costs. We employ provisions for misconduct costs as an instrumentalvariable to identify the causal effect of a bank capital shock on risk-taking.Using new hand-collected data, we show that misconduct...

The financial stability report of the Banco de la República of Colombia (BR) provides broad coverage of macroeconomic environment and the assessment of risks in the financial system. The BR should continue developing data and enhancing forward-looking analytical approaches, sharpen messages on...

Commercial Real Estate (CRE) debt constitute a large portion of corporate debt. Due to the funding structure this creates substantial risks for the financial system and the real economy, in general, due to broader spillover effects. Stress tests, conducted to assess the resilience of CRE sector,...