Tightening financial regulation squeezes banking activities into the shadow banking sector, which may hurt financial stability and production (Plantin, 2014). Unlike Plantin’s work, we investigate regulations that reduce banks’ leverage and dampen financial amplification effects. Moreover, our paper studies the trade-off between economic growth and financial stability in light of shadow banking...

I probably do not need to emphasise that meaningful accounting standards and their effective implementation are highly relevant to any central bank’s responsibilities for financial stability. They help to ensure the safe and efficient functioning of the financial system. So it is essential that accounting standards have a clear economic rationale, promote comparability and secure adequate discl...

Following the financial crisis of 2007-2008, a deep analogy between the origins of instability in financial systems and complex ecosystems has been pointed out: in both cases, topological features of network structures influence how easily distress can spread within the system. However, in financial network models, the details of how financial institutions interact typically play a decisive rol...

This paper investigates whether a financial system can be made more stable if institutions share risk by exchanging contingent convertible (CoCo) debt obligations. The question is framed in network model of and equity interlinkages with the addition variant CoCo that converts continuously when bank’s equity–debt ratio drops to trigger level. main theoretical result complete characterization cle...