Central banks

Fiscal drag in theory and in practice: a European perspective

10/09/2025 European Central Bank Central banks

This paper presents a comprehensive characterization of “fiscal drag”—the increase in tax revenue that occurs when nominal tax bases grow but nominal parameters of progressive tax legislation are not updated accordingly—across 21 European countries using a microsimulationapproach. First, we estimate tax-to-base elasticities, showing that the progressivity built in each country’s personal income tax system induces elasticities around 1.7–2 for many countries, indicating a potential for large fiscal drag effects.

Details matter – how loan pricing affects monetary policy transmission in the euro area

10/09/2025 European Central Bank Central banks

We present novel empirical evidence on lending practices across all euro area countries, using AnaCredit data covering nearly seven million new loans issued to non-financial corporations in 2022-23. We document substantial variation in (a) the prevalence of fixed versus floating-rate loans, (b) rate fixation periods, and (c) reference rates. This variation results in lending rates being exposed to different segments of the risk-free rate yield curve which, in turn, influences their sensitivity to monetary policy changes.

Minutes of the London FXJSC Main Committee Meeting - 26 June 2025

10/08/2025 Bank of England Central banks

The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC), which is a forum for discussion of the wholesale foreign exchange market. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.

Minutes of the London FXJSC Legal Sub-Committee Meeting - 24 June 2025

10/08/2025 Bank of England Central banks

The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Legal Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.

Minutes of the London FXJSC Operations Sub-Committee Meeting - 18 June 2025

10/08/2025 Bank of England Central banks

The Bank of England chairs the London Foreign Exchange Joint Standing Committee (FXJSC) Operations Sub-Committee. The FXJSC is made up of market participants, infrastructure providers and the UK financial regulators.

Financial Policy Committee Record – October 2025

10/08/2025 Bank of England Central banks

Our Financial Policy Committee (FPC) meets to identify risks to financial stability and agree policy actions aimed at safeguarding the resilience of the UK financial system.

Decoding climate-related risks in sovereign bond pricing: a global perspective

10/08/2025 European Central Bank Central banks

Climate change poses a significant risk to financial stability by impacting sovereign credit risk. Quantifying the exact impact is difficult as climate risk encompasses different components– transition risk and physical risk – with some of these, as well as the policies to address them, playing out over a long time horizon. In this paper, we use a large panel of 52 developed and developing economies over two decades to empirically investigate the extent to which climate risks influence sovereign yields.

Foreign Currency Reserves 2025 – Market Notice 7 October 2025

10/07/2025 Bank of England Central banks

Not for distribution, directly or indirectly, in or into the United States, Canada, Australia, Japan or any other jurisdiction where it is unlawful to distribute this announcement.

Minutes: CBDC Academic Advisory Group - June 2025

10/07/2025 Bank of England Central banks

Meeting of the CBDC Academic Advisory Group

A study on the interaction of capital, liquidity and bank stability

10/07/2025 European Central Bank Central banks

The purpose of this paper is to empirically examine the effects of capital and liquidity on bank stability as well as the existence of a potential complementary or substitute relationship between both dimensions to explain bank stability. We use a sample of 16,061 banks from 27 countries during the period 2013-2023. Our results show that both capital and liquidity increase bank stability. However, the joint interactive effect presents a negative coefficient indicating the existence of a potential substitution effect between both variables.

Pages