Financial institutions

FEDS Paper: Financial Structure and Mergers

09/19/2025 Federal Reserve Central banks

Charles Taragin, Benjamin Wallace, Eddie WatkinsWe study how corporate debt influences the competitive outcomes of horizontal and conglomerate mergers. In contrast to standard models where debt does not affect pricing, our framework shows that mergers can spread fixed debt obligations across a broader product portfolio, creating an "insurance effect" against adverse demand shocks. This effect interacts with the traditional recapture effect from reduced competition.

Asset Purchase Facility: Gilt Sales – Market Notice 18 September 2025

09/18/2025 Bank of England Central banks

At its meeting ending on 17 September 2025, the MPC voted to reduce the stock of gilts held in the Asset Purchase Facility (APF) for monetary policy purposes by £70 billion over the next twelve months. This Market Notice sets out the schedule for sales in Q4 2025 of gilts held in the APF for monetary policy purposes.

Bank Rate maintained at 4% - September 2025

09/18/2025 Bank of England Central banks

The Bank of England’s Monetary Policy Committee is responsible for making decisions about Bank Rate.

Monetary Policy Committee dates for 2026

09/18/2025 Bank of England Central banks

2026 confirmed dates

Exchange of letters between the Governor and the Chancellor regarding CPI Inflation - September 2025

09/18/2025 Bank of England Central banks

Exchange of letters between the Governor and the Chancellor

Minutes: CBDC Academic Advisory Group – March 2025

09/17/2025 Bank of England Central banks

Meeting of the CBDC Academic Advisory Group

Mortgage loan rates and the defaults of variable rate mortgages

09/16/2025 European Central Bank Central banks

Using a granular database of variable rate euro area loans and analysing their defaults between 2014 and 2019, we show that the effect of interest rate changes on mortgage defaults is highly non-linear. First, we find that the risk associated with higher contemporaneous interest rates is concentrated among borrowers who got the loan at ultra-low interest rates, their default probability being 2.6 times higher than our sample average.

Central bank money as a catalyst for fungibility: the case of stablecoins

09/16/2025 European Central Bank Central banks

To ensure that means of payments are readily interchangeable at face value – i.e. fungible – for retail payments, three elements are required: (1) settlement finality; (2) interoperability; and (3) seamless convertibility of the means of payment into the “ultimate” or quasi-ultimate means of payment.

The signaling effects of fiscal announcements

09/15/2025 European Central Bank Central banks

Announcing a large fiscal stimulus may signal the government’s pessimism about the severity of a recession to the private sector, impairing the stabilizing effects of the policy. Using a theoretical model, we show that these signaling effects occur when the stimulus exceeds expectations and are more noticeable during periods of high economic uncertainty. Analysis of a new dataset of daily stock prices and fiscal news in Japan supports these predictions.

The heterogeneous impact of labor market shifts on household mortgage-taking

09/15/2025 European Central Bank Central banks

This paper examines how structural change in labor markets affects household credit outcomes. Using a Shift-Share instrumental variable approach, we find that occupational shifts negatively influence mortgage holding for households facing fa-vorable job market conditions, such as stable employment and income growth. Our results, robust to alternative specifications, suggest that when both individual and economy-wide career prospects are favorable, the opportunity costs of settling down grow accordingly.

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