On 23 July 2020, the European Systemic Risk Board published a technical note summarising the findings of a cross-sectoral, top-down analysis that sought to quantify the aggregate potential impact of large-scale corporate bond downgrades. This column summarises the main findings of the exercise, provides a rationale for such analyses, and suggests repeating such system-wide exercises regularly and on a global level to uncover vulnerable links and improve institutions’ own risk management.
John Fell, Francesco Mazzaferro, Richard Portes, Eric Schaanning, 11 September 2020
Philip Lane, Sam Langfield, 28 February 2018
The euro area’s macro-financial framework is incomplete and fragile. This column highlights how a market for sovereign bond-backed securities could help to enhance financial stability by providing automatic stabilisation. Drawing on a recent feasibility study published by a High-Level Task Force of the European Systemic Risk Board, it outlines how to pave the way for market development by removing regulatory obstacles.