Financial institutions

Connecting payment systems, linking economies

09/24/2026 European Central Bank Central banks

Cross-border payments are often slow and costly with many regions underserved by current arrangements. In line with the G20 Roadmap for Enhancing Cross-border Payments, several countries and regions, including the euro area, are working to interlink their domestic fast payment systems as a way to improve speed, cost and transparency. Econometric evidence suggests that countries with interlinked systems trade about 4% more with each other – around half of the effect of a trade agreement and a quarter of the effect of a common currency.

Scaling up European firms: the case for an EU company law regime to unlock cross-border investment, innovation and growth

09/23/2026 European Central Bank Central banks

Europe’s competitiveness challenge is increasingly recognised as a scale-up challenge. Firms expanding across the Single Market continue to face regulatory burdens and legal fragmentation throughout their life cycle, increasing the cost and complexity of cross-border operations. This article examines how these barriers affect the ability of firms to scale up and assesses the extent to which the European Commission’s proposal for an optional European corporate form (EU Inc.) could help firms.

Which countries are most vulnerable to the industrial rise of China? Mapping Europe’s uneven exposure

09/22/2026 European Central Bank Central banks

This box discusses the heterogeneous impact on EU countries of China’s rapid industrial transformation, which is reshaping global trade patterns. The similarity between the export structures of China and several EU countries has increased substantially since 2019, particularly in machinery and transport equipment, and is most pronounced in manufacturing-intensive economies, such as Germany. At the same time, China’s goods imports have become less aligned with EU export structures, illustrating China’s decreased reliance on European industrial goods.

Monetary policy transmission by securitising banks

09/22/2026 European Central Bank Central banks

This paper studies whether securitisation affects monetary policy transmission via banks. Using granular loan-level data from the euro area, we show that banks actively engaged in securitisation adjust credit supply more strongly in response to monetary policy shocks than a matched sample of non-securitising banks. This is because securitisation expands banks’ lending capacity, but by increasing reliance on investors whose required returns and risk appetite are more sensitive to monetary policy conditions.

Artificial intelligence and financial markets

09/22/2026 European Central Bank Central banks

Artificial intelligence is transforming financial markets by enabling investors and intermediaries to extract more information from increasingly abundant data through advances in algorithms and computing power. We discuss how AI changes information production and decision-making, labor demand, and financial intermediation, with a particular emphasis on securities markets. We then survey the implications of this transformation for market efficiency, competition, informational frictions, and financial stability.

US equity market developments during the AI boom

09/22/2026 European Central Bank Central banks

This box analyses developments in US equity markets during the recent AI boom and highlights recent signs of heightened price differentiation within the broader equity market rally. It shows that, over the past years, US equity valuations have been bolstered by strong realised and expected earnings tied to the AI boom. Risk appetite in US equity markets has been strong, with compensation for equity risk falling to relatively low levels during this period.

FEDS Paper: Beyond Financial Conditions: Measuring Structural Vulnerabilities in the U.S. Financial System

09/21/2026 Federal Reserve Central banks

Michele Modugno, Benjamin Roscoe, Sarah ZoiWe introduce the Financial Vulnerability Index (FVI), a novel indicator of financial vulnerabilities in the U.S. Unlike financial condition indices, which measure current credit market conditions and spike during periods of financial turmoil, the FVI displays the gradual build-up of structural financial weaknesses and declines as such episodes materialize.

Navigating uncertainty: how the Middle East conflict is shaping expectations and coping strategies of firms

09/21/2026 European Central Bank Central banks

In the Survey on the Access to Financing of Enterprises (SAFE) for the second quarter of 2026, firms were asked about their exposure to the conflict in the Middle East, how the conflict has influenced their expectations, and what coping strategies they have adopted. It found that exposure to the conflict is higher for small and medium-sized enterprises, for exporters and in the trade sector. The conflict has primarily affected firms’ expectations for nominal variables and demand, while the impact on expectations for other real variables is small.

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