Research
FSB urges tighter oversight of AI adoption in finance
Reliance on generative AI services can give rise to third-party risk concerns, body warns
Rising temperatures raise inflation expectations – ECB paper
Global warming also leads to greater pessimism about growth, research finds
Sovereign defaults fell in 2024, says Bank of Canada study
However, debt service payments still high as interest rates remain elevated
National statistics need reform to capture AI impact – study
Official data tends to lack the granularity to capture transformative effects of AI, authors say
NBER paper suggests ‘dot plot’ for financial conditions
Producing forward guidance of asset prices will improve central bank communications, economists say
Uncertainty over economic policy throttles lending – ECB study
Authors point to recent developments in US, but say sources of uncertainty can come from anywhere
News coverage drove 2023 US bank runs – NY Fed study
Equity investors only became attuned to lenders’ weak fundamentals after mass panic began
AI could fundamentally alter market dynamics – Fed study
Tech is not purely algorithmic as it has inherited human biases, say authors
Eurozone payment systems not ready for quantum – research
Bank of Italy paper calls for more robust cryptographic algorithms and quantum roadmaps from suppliers
EMs can adopt higher inflation targets – BoE Bulletin
Authors say more elevated goals reflect economies’ faster growth and susceptibility to supply shocks
IMF paper draws lessons from Sri Lanka’s debt restructuring
Country sought to negotiate simultaneously with array of creditors, while executing reform plan
Europeans flock to cash during times of crisis – ECB research
Study highlights hard currency’s role as ‘spare’ tyre in payments system
IMF study outlines ‘optimal policy’ for tokenisation
Researchers recommend interoperability mandates and public-private cost-sharing
NBER paper explores drivers of collateral prepositioning
Authors ask why US banks choose not to pledge all their available collateral at the Fed
Eurozone consumers shifted habits after tariffs – ECB survey
More financially literate citizens stopped buying US goods, consumer expectations survey shows
Signalling sizeable spending spooks stock markets – ECB study
Larger-than-expected fiscal measures in times of uncertainty could backfire on governments
NBER paper emphasises role of accounting in bank regulation
Bookkeeping conventions matter to how effective capital and liquidity rules are, authors write
New taxonomy of operating frameworks from BIS economists
Two-dimensional approach captures “surprising similarities” between different methods
Dollar dominance amplifies transmission of US shocks – study
Bank of Korea research recommends promoting South Korean bonds and internationalisation of won
Riksbank deputies say rate forecasting key to transparency
Officials say advantages of openness outweigh drawbacks
US consumers’ expectations of finding work hit new low – study
Mean perceived probability of a newly unemployed person finding a job fell to 44.9%
Liquidity impairment harms policy transmission – BIS paper
Authors say QE may be more potent in times of market stress
Little impact on Sweden’s inflation from US’s China tariffs – study
Sveriges Riksbank paper says levies will affect Swedish exporters in as yet unknown ways
US SMEs less fazed by tariff turmoil – Boston Fed survey
Study suggests further uncertainty over levies would no longer cause firms’ outlook to deteriorate