Category Archives: Systemic Risk

Negative Interest Rates: Sharp Increase in Risk-Taking Behavior

By | February 12, 2020

Courtesy of Maren Baars, Henning Cordes, and Hannes Mohrschladt As a consequence of the global financial crisis and the European sovereign debt crisis, risk-free nominal interest rates have plummeted – in some countries, they even turned negative. These interest rate decreases lead to a systematically higher risk appetite by institutional investors, such as banks and… Read More »

A New Source of Systemic Risk: Cloud Service Providers

By | August 8, 2019

Courtesy of David Fratto and Lee Reiners Last week’s announcement that a hacker accessed the personal information of approximately 106 million Capital One card customers and applicants has cast fresh light on financial institutions increasing reliance on the cloud. The hacker, a former employee of Amazon Web Services Inc., allegedly breached Capital One’s firewalls to… Read More »

Can Prudential Regulation Help the Transition to a Green Economy?

By | February 22, 2019

Courtesy of Lorenzo Esposito[1], Giuseppe Mastromatteo[2] and Andrea Molocchi[3] Among the many lessons learned by the financial industry, central banks, and economists in the wake of the global financial crisis, the most important may be the relevance of systemic risk. In a market dominated by multinational financial conglomerates, developments and disruptions in one country can… Read More »