This special feature discusses the channels through which climate change can affect financial
stability and illustrates the exposure of euro area financial institutions to risks from climate …

The financing structure of the euro area economy has evolved since the global financial crisis
with non-bank financial intermediation taking a more prominent role. This shift affects the …

Two important problems arising in traditional asset allocation methods are the sensitivity to
estimation error of portfolio weights and the high dimensionality of the set of candidate assets…

This paper explores how the need to transition to a low-carbon economy influences firm
credit risk. It develops a novel dataset which augments data on firms’ green-house gas …

We examine the transmission of monetary policy via the euro area investment fund sector
using a BVAR framework. We find that expansionary shocks are associated with net inflows …

The ECB has been intensifying its quantitative work aimed at capturing climate-related risks
to financial stability. This includes estimating financial system exposures to climate-related …

This paper presents an approach to a macroprudential stress test for the euro area banking
system, comprising the 91 largest euro area credit institutions across 19 countries. The …

The main objective in index tracking is to replicate the performance of a target index by
using a small subset of its constituents. Non-convex regularization techniques, such as the $$\ell …

Recent policy discussion includes the introduction of diversification requirements for
sovereign bond portfolios of European banks. In this paper, we evaluate the possible effects of …

Traditionally, insurers are seen as stabilisers of financial markets that act countercyclically by
buying assets whose price falls. Recent studies challenge this view by providing empirical …