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on European Economics |
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Issue of 2025–09–01
24 papers chosen by Simon Sosvilla-Rivero, Instituto Complutense de Análisis Económico |
| By: | Albertazzi, Ugo; Ferrando, Annalisa; Gori, Sofia; Rariga, Judit |
| Abstract: | This paper explores empirically the cost channel of monetary policy transmission during the recent period of monetary policy tightening in the euro area. We combine unique data on firms’ selling price expectation from the Survey on the access to finance of enterprises (SAFE), information on firms’ borrowing from the euro area-wide credit register (AnaCredit) and ECB monetary policy surprises. Firms revise upwards their one-year-ahead selling price expectations following monetary announcements in a tightening cycle and this effect increases in firms’ working capital exposure. The paper provides supportive evidence on the existence of a cost channel of monetary policy, adding to our understanding of monetary policy transmission to firms in the euro area. JEL Classification: G30, E52, D84 |
| Keywords: | firm financing, monetary policy, selling price expectations |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253097 |
| By: | De Santis, Roberto A.; Vinci, Francesca |
| Abstract: | We employ a novel regional dataset on European private investment and business R&D spanning the years 2000 to 2021, along with comprehensive historical data on European Union Structural and Investment (ESI) funds, to estimate whether ESIfunds have crowding-in or crowding-out effects on private investment and business R&D. Our analysis, leveraging regional variation and a fiscal instrument immune to region-specific shocks, reveals a significant crowding-in effect, with 1 euro in ESI funds increasing private investment by 1.1 euros and business R&D by 0.1 euros after two years. The effect is stronger in developed regions for private investment and in less developed regions for R&D. Additionally, crowding-in effects are stronger in regions where corporate private debt is relatively higher. Among the different ESI funds, the Cohesion Fund (CF) shows the largest estimated impact, while the European Regional Development Fund (ERDF) yields somewhat smaller but statistically more robust results. JEL Classification: E22, H54, O38, O52, R11, R58 |
| Keywords: | EU, fiscal instruments, private Investment, R&D, structural and investment funds |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253098 |
| By: | Ifrim, Adrian; Kollmann, Robert; Pfeiffer, Philipp; Ratto, Marco; Roeger, Werner |
| Abstract: | Based on an estimated two-region dynamic general equilibrium model, we show that the persistent productivity growth differential between the Euro Area (EA) and rest of the world (RoW) has been a key driver of the EA trade surplus since the launch of the Euro. A secular decline in the EA’s spending home bias and a trend decrease in relative EA import prices account for the stability of the EA real exchange rate, despite slower EA output growth. By incorporating trend shocks to growth and trade, the analysis departs from much of the open-economy macroeconomics literature which has focused on stationary disturbances. Our results highlight the relevance of non-stationary shocks for the analysis of external adjustment. |
| Keywords: | global growth divergences, trade balance, real exchange rate, estimated DSGE model, Euro Area, demand and supply shocks, persistent growth shocks |
| JEL: | C5 E2 E3 F3 F4 |
| Date: | 2025–07–21 |
| URL: | https://d.repec.org/n?u=RePEc:pra:mprapa:125401 |
| By: | Rice, Jonathan; Guerrini, Giulia Maria |
| Abstract: | Add full abstract text in one paragraph.This paper examines how the ECB’s 2022–2023 interest-rate hikes affected euro-area banks’ economic net worth and vulnerability to deposit runs. Drawing on granular, confidential data for 139 banks, we estimate each bank’s economic net worth and find that unrealised losses on loans and bonds averaged around 30 per cent of equity. By September 2023, however, roughly half of these losses had been offset by gains from the deposit franchise and interest-rate swaps. We develop a theoretical framework linking banks’ economic net worth and deposit-rate setting to depositor behaviour and run incentives. Further results indicate that banks with larger unrealised lossesraised their deposit rates by less - a pattern we interpret as banks leveraging a more valuable deposit franchise to fund longer-duration assets. Although euro-area banks as a whole avoided widespread runs, several institutions nonetheless carried substantial mark-to-market losses, suggesting latent fragilities. JEL Classification: G21, E43, E58, G28 |
| Keywords: | asset valuations, bank runs, euro area banking system, interest rate risk, monetary policy |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253090 |
| By: | Marius Faber; Gabriel Züllig |
| Abstract: | We estimate the slope of the Phillips curve in the euro area, allowing for nonlinearities - or kinks - in the relationship between labor market slack and inflation. We exploit cross-country variation in labor market conditions in the period 2001-2024, absorbing aggregate shocks and endogenous monetary policy reactions with time fixed effects. We find that while the Phillips curve is usually quite flat, it becomes at least three times as steep if the labor market is sufficiently tight. This kink is more pronounced in the euro area than in the United States, potentially because of more rigid labor markets. Our estimates imply, however, that despite this nonlinearity, the majority of the post-Covid inflation surge was due to factors other than tight labor markets. |
| Keywords: | Phillips curve, Inflation, Nonlinearities |
| JEL: | E30 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:snb:snbwpa:2025-12 |
| By: | Viral V. Acharya; Matteo Crosignani; Tim Eisert; Christian Eufinger |
| Abstract: | We document how the interaction of supply chain pressures, elevated household inflation expectations, and firm pricing power contributed to the pandemic-era surge in consumer price inflation in the euro area. Initially, supply chain disruptions raised inflation, particularly in manufacturing, through a cost-push channel, while also elevating inflation expectations. In turn, higher inflation expectations appear to have lowered the price elasticity of consumer demand and strengthened firms’ pricing power, enabling even firms in service sectors that were initially unaffected by supply constraints to raise markups. Through this expectations mechanism, localized inflation in sectors sensitive to supply-side shocks generalized into broad-based inflation. |
| Keywords: | inflation expectations; euro area; firm markups; market power; supply chain |
| JEL: | E31 E58 D84 L11 |
| Date: | 2025–08–01 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fednsr:101469 |
| By: | Cristiano Salvagnin; Vittorio del Tatto; Maria Elena De Giuli; Antonietta Mira; Aldo Glielmo |
| Abstract: | We propose to use a recently introduced non-parametric tool named Differentiable Information Imbalance (DII) to identify variables that are causally related -- potentially through non-linear relationships -- to the financial returns of the European Union Allowances (EUAs) within the EU Emissions Trading System (EU ETS). We examine data from January 2013 to April 2024 and compare the DII approach with multivariate Granger causality, a well-known linear approach based on VAR models. We find significant overlap among the causal variables identified by linear and non-linear methods, such as the coal futures prices and the IBEX35 index. We also find important differences between the two causal sets identified. On two synthetic datasets, we show how these differences could originate from limitations of the linear methodology. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.15667 |
| By: | FLORINA POPA (INSTITUTE OF NATIONAL ECONOMY, ROMANIAN ACADEMY, BUCHAREST) |
| Abstract: | The efficiency of revenue collection is a process that involves different operations in collection procedures, with the revenue collected being a main source of support for state budget spending. The paper aim was studying the impact of the direct taxes/indirect taxes ratio changes on Gini coefficient (inequality). The main result from the analysis is that the impact of the ratio between the direct taxes and indirect taxes on Gini coefficient (inequality) was pursued from three perspectives: a) increases in the direct taxes/indirect taxes ratio; b) decreases in the direct taxes/indirect taxes ratio; c) other situations regarding the change in the direct taxes/indirect taxes ratio. The paper was accomplished by: studying the scientific literature in the field, selecting, synthesizing and interpreting the ideas retained through the own view of the author; collecting data from the European Commission, DG Taxation and Customs Union, based on Eurostat; Eurostat Gini Coefficient of equivalised disposable income by age, drawing up the table needed in the analysis of economic indicators and processing and analysis of the data collected. The analysis was achieved for Member States of European Union (EU 27), for the period 2014-2022. Finally the paper ends with conclusions which highlights the final results of the research and signalize the three situations met in the analysis, mentioned above. |
| Keywords: | Efficiency of tax collecting; Taxation changes; Impact; Member States of European Union (EU 27); Direct taxes; Indirect taxes, Gini coefficient (inequality) |
| JEL: | H21 H71 O11 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:15116786 |
| By: | Cuzzola, Angelo; Barbieri, Claudio; Hałaj, Grzegorz |
| Abstract: | This study investigates the impact of supervisory stress testing on banks’ behaviors and their systemic risk implications. Utilizing confidential supervisory data from the European Banking Authority’s EU-wide stress tests in 2021 and 2023, we employ a difference-in-differences framework to analyze how these exercises influence portfolio management decisions among European banks. This methodology allows us to compare stress-tested banks with similar non-tested institutions before and after the stress test events, isolating the effects specifically associated with the EU-wide assessments. Our findings reveal significant patterns of anticipatory behavior, with banks strategically window-dressing their capital ratios before stress tests begin. This behavior is particularly pronounced among institutions that subsequently receive the lowest scores in terms of capital depletion. We document that these anticipatory adjustments lead to decreased portfolio similarity across banks, an effect that persists after the stress tests and remains consistent across different similarity measures. Importantly, such a decrease in similarity does not spin off into more granular business model or country clusters, thus limiting potential systemic risk through portfolio synchronization. Our results, while considering how financial institutions incorporate stress test considerations into their strategic decision-making, highlight the dual role of stress tests in enhancing individual bank resilience and reducing systemic vulnerabilities. These findings contribute to the ongoing debate on effective banking supervision and the design of regulatory stress testing frameworks. JEL Classification: G21, G28, E58, C23 |
| Keywords: | banking supervision, financial stability, portfolio similarity, stress testing, systemic risk, window-dressing |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253094 |
| By: | Hellenkamp, Detlef |
| Abstract: | Die regulatorische Agenda 2025+ stellt den europäischen Bankensektor vor eine signifikante Konvergenz komplexer Anforderungen, darunter die Finalisierung von Basel III (CRR III/CRD VI), der Digital Operational Resilience Act (DORA), die Markets in Crypto-Assets Regulation (MiCAR), das neue Paket zur Bekämpfung von Geldwäsche und Terrorismusfinanzierung (AML/CFT) mit der Einrichtung der AMLA sowie die fortschreitende Implementierung von ESG-Regulierungen (CSRD/ESRS, Taxonomie). Die Ergebnisse dieser Arbeit zeigen, dass trotz der unbestreitbaren Notwendigkeit zur Stärkung der Resilienz und Integrität des Sektors die aggregierte regulatorische Komplexität, die erheblichen Implementierungskosten sowie potenzielle normative Inkonsistenzen, substanzielle Herausforderungen für die Wettbewerbs- und Innovationsfähigkeit der Institute konstituieren. Insbesondere Interaktionen im Kontext der digitalen Transformation, die Gewährleistung regulatorischer Proportionalität sowie eine datenschutzkonforme Handhabung umfangreicher Datenmengen erfordern eine präzise austarierte Kalibrierung im Sinne einer differenziert und kohärent ausgestalteten („smarteren“) Regulierung. Die aufsichtlichen Prioritäten der Europäischen Zentralbank (EZB) und der Europäischen Bankenaufsichtsbehörde (EBA) reflektieren diese Herausforderungen und erfordern tiefgreifende strategische Reorientierungen innerhalb der Geschäftsmodelle und Risikomanagement-Frameworks der Institute. Der Ausblick deutet auf eine anhaltend hohe Regulierungsdynamik hin, die zunehmend von der Notwendigkeit geprägt sein wird, die komplexen Wechselwirkungen zwischen finanzstabilitätsbezogenen Zielsetzungen, technologischer Innovationsfähigkeit und nachhaltigkeitsorientierten Anforderungen systematisch zu steuern. |
| Abstract: | The 2025+ regulatory agenda presents the European banking sector with a significant convergence of complex requirements, including the finalisation of Basel III (CRR III/CRD VI), the Digital Operational Resilience Act (DORA), the Markets in Crypto-Assets Regulation (MiCAR), the new Anti-Money Laundering and Countering the Financing of Terrorism (AML/CFT) package with the establishment of the AMLA, and the ongoing implementation of ESG regulations (CSRD/ESRS, EU Taxonomy). The results of this work show that, despite the undeniable need to strengthen the resilience and integrity of the sector, the aggregated regulatory complexity, the considerable implementation costs and potential normative inconsistencies constitute substantial challenges for the competitiveness and innovative capacity of institutions. In particular, interactions in the context of digital transformation, ensuring regulatory proportionality and handling large volumes of data in compliance with data protection regulations require precise calibration in the sense of differentiated and coherent (‘smarter’) regulation. The supervisory priorities of the European Central Bank (ECB) and the European Banking Authority (EBA) reflect these challenges and require far-reaching. The outlook points to a persistently high regulatory dynamic that will be increasingly characterised by the need to systematically manage the complex interactions between financial stability-related objectives, technological innovation capability and sustainability-oriented requirements. |
| Keywords: | AI Act, AML/CFT package (AMLA), Supervisory Priorities, Basel III (CRR III/CRD VI), Corporate Sustainability Reporting Directive (CSRD), Digitalisation, Digital Operational Resilience Act (DORA), Digital Transformation, ESG Regulation, European Sustainability Reporting Standards (ESRS), Markets in Crypto-Assets Regulation (MiCAR), Proportionality in banking regulation, RegTech & SupTech, Smart Regulation |
| JEL: | G28 G21 K23 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:324490 |
| By: | Rudolf Holik (Prague University of Economics and Business) |
| Abstract: | Cohesion policy is a cornerstone of the European Union?s efforts to reduce regional disparities and promote balanced development. As the EU prepares for the post-2027 period, this policy is under review to ensure it responds to emerging challenges such as climate change, digital transformation, demographic shifts, and geopolitical uncertainty. For the Czech Republic, a key cohesion fund beneficiary, this reform represents both a challenge and a strategic opportunity.This paper examines the Czech Republic?s implementation of cohesion policy during the 2021?2027 programming period, identifying persistent barriers including administrative complexity, slow absorption, and limited territorial flexibility. It then analyses the Czech Republic?s engagement in shaping the future policy framework, including contributions to EU-level debates, strategic alliances, and formal position papers. Particular attention is paid to recent milestones such as the 9th Cohesion Report, the High-Level Group?s recommendations, and joint declarations by Member States.Building on this context, the paper identifies five strategic options for the Czech Republic: securing adequate cohesion funding; applying place-based, integrated territorial development tools; strengthening flexibility and crisis resilience; simplifying implementation while focusing on results; and preparing for EU enlargement. These options form the basis for concrete recommendations to develop a post-2027 national cohesion strategy.The study concludes that the Czech Republic must move beyond defending financial allocations and adopt a proactive, future-oriented stance. A well-structured strategy that aligns domestic priorities with EU reform will help the country maximize its cohesion investments and contribute meaningfully to shaping a more resilient and inclusive Europe. |
| Keywords: | Cohesion Policy; Regional Development; Structural Funds; Czech Republic; European Union; Multiannual Financial Framework; EU Policy Reform; Territorial Governance; Smart Specialisation; EU Budget |
| JEL: | R58 H77 H50 |
| URL: | https://d.repec.org/n?u=RePEc:sek:iefpro:15116866 |
| By: | Degryse, Hans; De Jonghe, Olivier; Laeven, Luc; Zhao, Tong |
| Abstract: | This paper studies the role of collateral using the euro area corporate credit registry, Ana-Credit. We document key facts about the importance, distribution, and composition of collateral, including its presence, types, and values. On average, 70% of credit amounts are collateralized. Real estate and financial assets are the most pledged, while physical movable assets and other intangible assets are less present. In addition, we show that the aggregate collateral value pledged to the banking sector is substantial, driven mainly by real estate in most countries. For the first time, we examine the collateral channel in bank credit using the actual value of individual collateral. By exploiting within-firm and within-bank variations for newly issued secured loans, we find that the elasticity of collateral value to loan commitment amounts is around 0.7-0.8. This collateral value elasticity exhibits substantial country and time heterogeneity, which can be explained by legal, financial, and macro conditions. JEL Classification: E32, G21, G33 |
| Keywords: | bank credit, collateral channel, corporate financing, secured debt |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253095 |
| By: | Iancu, Aurel (Institutul National de Cercetari Economice al Academiei Române) |
| Abstract: | This article is a review of the economic literature on the attempt to solve the problem of the impossible trilemmas of the euro area by reconciling the relations between the three essential pillars – supranational monetary independence, national fiscal independence and the no-bailout clause applied in the union of states with single currency. The analyses carried out show that the first countries to fall victim to the economic and financial crisis where the least developed with high levels of public debt and which did not respect the nominal convergence criteria. The wide range of measures taken following the crises aimed not only at economic recovery, but also at significant changes in the architecture of the essential pillars and the relations between them by applying a mix of policies to relax these restrictive relations and accompanied by measures to respect financial and fiscal discipline. On the other hand, in order to resolve critical moments of financial balances, including insolvency, special intervention fund and financial facilities were created. It was the transition from the no bail-out clause to the explicit bail-out regime. The last section also reveals the existence of a significant upward trend in measures and reforms which support increasing efficiency of actions and fiscal competences at the EU and member state levels. The text emphasizes the EU’s contribution to simplify and modernize the fiscal system of the member states. In the new conditions, fiscal policy should no longer be seen as a state of opposition between the common fiscal policy and the sovereign fiscal policy, but rather as a state of cooperation and support given to the member states under the conditions of the wide application of the principles of subsidiarity and proportionality. |
| Keywords: | impossible trilemma, essential pillars, single currency independence, national fiscal independence, no bailout clause, explicit bail-out regime, insolvency, compatibility, crisis, mix policies, quantitative easing, financial funds and facilities, principle of subsidiarity |
| JEL: | A12 B41 E32 E42 E63 E52 E58 F02 F6 H2 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ror:seince:250821 |
| By: | Garcia Anton, Ricardo (Tilburg University, School of Economics and Management) |
| Date: | 2024 |
| URL: | https://d.repec.org/n?u=RePEc:tiu:tiutis:b2c25745-8118-415b-a3bf-4f75bceacacc |
| By: | Theodore Kapopoulos (Athens University of Economics and Business - Department of Accounting and Finance); Dimitrios Anastasiou (Athens University of Economics and Business - Department of Business Administration); Steven Ongena (University of Zurich - Department Finance; Swiss Finance Institute; KU Leuven; NTNU Business School; Centre for Economic Policy Research (CEPR)); Athanasios Sakkas (Athens University of Economics and Business - Department of Accounting and Finance) |
| Abstract: | We investigate the relationship between global geopolitical risk and bank deposit flows across a wide panel of European countries. Motivated by the pivotal role of deposit stability for financial intermediation and systemic resilience, we explore whether geopolitical shocks alter depositors' portfolio choices. Using quarterly country-level data and employing the Geopolitical Risk Index (GPR) of Caldara and Iacoviello (2022) along with its sub-indices (GPR Acts and GPR Threats), we document that rising global geopolitical risk significantly increases aggregate bank deposits. Specifically, a one-standard-deviation increase in geopolitical risk is associated with an average rise of €13.3 billion in household deposits and €5.6 billion in corporate deposits, highlighting the sizable financial reallocation triggered by global uncertainty. This positive effect is channelled through a reallocation from riskier assets to deposits, with a stronger reaction observed among households compared to firms. Our findings suggest that bank deposits act as a safe-haven asset in periods of heightened global tensions, complementing the flight-to-safety phenomenon documented in sovereign bond markets. The results have important implications for financial stability analysis, monetary policy transmission and banks' liquidity risk management under geopolitical stress. |
| Keywords: | bank deposit flows, geopolitical risk, financial instability |
| JEL: | G4 G21 F51 |
| Date: | 2025–07 |
| URL: | https://d.repec.org/n?u=RePEc:chf:rpseri:rp2564 |
| By: | Mengting Li (School of Finance, Nanjing University of Finance and Economics, Nanjing 210023, China); Yu Wei (School of Finance, Yunnan University of Finance and Economics, Kunming 650221, China); Rangan Gupta (Department of Economics, University of Pretoria, Private Bag X20, Hatfield 0028, South Africa); Oguzhan Cepni (Ostim Technical University, Ankara, Turkiye; University of Edinburgh Business School, Centre for Business, Climate Change, and Sustainability; Department of Economics, Copenhagen Business School, Denmark) |
| Abstract: | This paper investigates the dynamic risk spillovers and frequency-domain connectedness between climate-related financial risk, traditional market volatility, and key macroeconomic variables in the overall European Union region. Employing a novel Mixed-Frequency Vector Autoregression with Frequency Domain Decomposition (MF-VAR-FDD) model, we analyze a unique dataset comprising weekly volatility indices for carbon (Carbon VIX), gold (Gold VIX), oil (Oil VIX), and equities (Euro VIX), alongside monthly data for industrial production, the ECB's shadow short rate, and inflation. This methodology allows for a nuanced decomposition of risk transmission across short-term (high-frequency) and long-term (low-frequency) horizons, providing critical insights that are obscured in common-frequency analyses. Our empirical results reveal a distinct asymmetry in the risk network: financial and commodity volatility indicators consistently act as net transmitters of risk, whereas macroeconomic fundamentals are systemic net receivers. The total spillover index is highly time-variant, exhibiting significant spikes that coincide with major economic and geopolitical events. The frequency decomposition further demonstrates that high-frequency (0-3 months) spillovers are predominantly driven by interactions within financial markets, with the Euro VIX playing a central role. Conversely, low-frequency (beyond 3 months) spillovers are more structural, with commodity price volatility (Oil VIX) and monetary policy expectations (ECB SSR) emerging as the largest long-term risk transmitter and receiver, respectively. More importantly, we find the prominent and pervasive role of the Carbon VIX as a source of systemic risk. Across the full sample, the Carbon VIX emerges as the most powerful net risk transmitter, indicating that volatility originating from the carbon market significantly propagates throughout the financial and macroeconomic system. Our findings, robust to alternative model specifications, underscore the imperative for policymakers and investors to integrate carbon market dynamics into their risk management frameworks and highlight the inadequacy of traditional models that ignore mixed-frequency information. |
| Keywords: | Carbon price uncertainty, Macroeconomy, Mixed-frequency Spillover, Time- and Frequency Domain |
| JEL: | C32 E30 E44 G10 Q02 Q54 |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:pre:wpaper:202527 |
| By: | Ece Fisgin; Joaquin Garcia-Cabo; Alex Haag; Mitch Lott |
| Abstract: | We present a principal component analysis of euro area labor market conditions by combining information from 22 labor market indicators into two comprehensive series. These two novel indicators provide a systematic view of the current state and forward-looking direction of the euro-area labor market, respectively, and demonstrate superior forecasting performance compared to existing indicators. Crucially, we find significant implications for monetary policy design: a local projection analysis reveals that ECB monetary policy shocks have attenuated effects on both inflation and unemployment when the labor market forward-looking indicator is high. The dampened inflation response calls for tighter policy rate paths than a standard Taylor rule would prescribe. Finally, we show that focusing solely on the official unemployment rate may understate the actual labor market slack, and consequently, the trade-off between labor market health and inflationary dynamics. |
| Keywords: | Employment; Unemployment; Labor market forecasting; European labor market |
| JEL: | E24 E27 J63 |
| Date: | 2025–08–13 |
| URL: | https://d.repec.org/n?u=RePEc:fip:fedgif:1415 |
| By: | Marie-Sophie Lappe; David Pinkus |
| Abstract: | Expanding funded pensions via auto-enrolment could boost long-term investment and saver security, allowing the EU to address its investment gap |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:bre:wpaper:node_11208 |
| By: | Hellenkamp, Detlef |
| Abstract: | Der europäische, insbesondere der deutsche Bankensektor befindet sich in einer Phase tiefgreifender struktureller Transformation, die durch die gleichzeitige Wirkung und Wechselwirkung mehrerer makrostruktureller Treiber geprägt ist. Die fortschreitende Digitalisierung – insbesondere durch Künstliche Intelligenz (KI) und Distributed-Ledger-Technologie (DLT) – eine ESG-Integration als strategischer und regulatorischer Imperativ, ein sich verschärfender regulatorischer Rahmen (u. a. Basel IV, DORA, EU AI Act, MiCA), demografische Veränderungen sowie eine intensivierte Wettbewerbssituation durch digitale Akteure und verändertes Kundenverhalten, stellen Kreditinstitute vor tiefgreifende Herausforderungen. Dieses Diskussionspapier diskutiert die Auswirkungen dieser Treiber auf Geschäftsmodelle, Risikomanagement, operationelle Resilienz, regulatorische Anpassungsbedarfe und strategische Positionierung von Banken im deutschen und europäischen Kontext. Es zeigt auf, dass die simultane Bewältigung dieser Transfor- mationen – unter Bedingungen erhöhter Komplexität, steigender Anforderungen an Kapital, Technologie und Personal – integrierte Steuerungsansätze und tiefgreifende organisatorische Anpassungen erfordert. Im Fokus stehen dabei insbesondere: die strategische Nutzung von KI unter Berücksichtigung ethischer und regulatorischer Grenzen, die Verankerung von ESG in Risikosteuerung und Produktstrategie, die Auswirkungen der Basel-IV-Regelungen auf die Kapitalstruktur, sowie die Relevanz demografischer Verschiebungen für Kundenschnittstellen, Personalstrategien und Vertriebsmodelle. Die Arbeit schließt mit der Formulierung strategischer Imperative für Banken als Ansatz einer zukunftsorientierten, resilienten und wettbewerbsfähigen Neuausrichtung. |
| Abstract: | The European, and in particular the German, banking sector is in a phase of profound structural transformation that is characterised by the simultaneous impact and interaction of several macro-structural drivers. Advancing digitalisation - particularly through artificial intelligence (AI) and distributed ledger technology (DLT) - ESG integration as a strategic and regulatory imperative, a tightening regulatory framework (including Basel IV, DORA, EU AI Act, MiCA), demographic changes and intensified competition from digital players and changing customer behaviour are presenting banks with profound challenges. This discussion paper explains the impact of these drivers on business models, risk management, operational resilience, regulatory adjustment requirements and the strategic positioning of banks in the German and European context. It shows that the simultaneous management of these transformations - under conditions of increased complexity and rising demands on capital, technology and personnel - requires integrated management approaches and far-reaching organisational adjustments.In particular, the focus is on: the strategic use of AI, taking into account ethical and regulatory limits, the anchoring of ESG in risk management and product strategy, the impact of Basel IV regulations on the capital structure, and the relevance of demographic shifts for customer interfaces, HR strategies and sales models. The work concludes with the formulation of strategic imperatives for banks as an approach to a future-oriented, resilient and competitive realignment. |
| Keywords: | AI in banking, Banking regulation and supervision, Bank Risk Management, Cybersecurity, Digitalization in banking, Distributed Ledger Technology (DLT), DORA (Digital Operational Resilience Act), ESG, Structural changes in banking, Tokenization and the financial sector |
| JEL: | G21 G28 Q33 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:esprep:324489 |
| By: | Krassen Stanchev |
| Abstract: | Since 1989, flat tax (FT) reforms have been attempted in Europe and the EU only by ex-communist countries and Iceland. In the 1990s all ex-communist countries lowered and simplified their income taxes, often starting with corporate taxes. In the late 1990s and early 2000s they also reformed their social security systems. In many respects the tax reforms have never stopped, but with regard to income taxation they are less radical than in the 1990s and at the turn of this century. Even when there were reforms re-establishing progressive taxation, they have almost never returned to complex sets of nominal rates and a steep vertical ladder of progressive thresholds. This report attempts to reconstruct the reasons why EU countries moved to introduce proportional taxation on either corporate or personal income, or both, as well as the reasons behind five of them returning to progressive taxation. These reforms happened in different political and economic contexts. It would be difficult to identify unequivocal causality between flattening taxes and economic performance. However, the report compares the dynamics of economic growth and factors related to competitiveness for periods before and after the reforms were launched. The same effort has been made for indicators of wealth and disposable income. The analysis allows for a discussion of lessons learnt and of the prospects for further reforms. The report concludes that it seems impossible to prove that FT systems have been a key contributor to higher economic growth. However, it does seem that, if the social security contributions remain relatively stable and are financed by other tax revenues, they have a positive impact on fiscal performance and general welfare. |
| Keywords: | tax system, tax reform, proportional taxation, progressive taxation, corporate tax, personal income tax, economic performance, ex-communist countries, EU |
| JEL: | E62 H23 H24 H25 H26 H31 H32 |
| Date: | 2023–12–07 |
| URL: | https://d.repec.org/n?u=RePEc:sec:mbanks:0175 |
| By: | T\'imea Kov\'acs; D\'ora Gr\'eta Petr\'oczy; G\'abor P\'asztor |
| Abstract: | As of 2022, the European Union has taken several steps regarding enlargement. We focus on the accession of countries with which the Union is actively negotiating membership. This is examined under two enlargement scenarios: first, the enlargement along the lines of the Western Balkan countries, and second, the accession of a trio (Ukraine, Moldova, and Georgia) to the already enlarged Union. We determine the a priori power of the member states based on the Banzhaf and Shapley--Shubik indices. Various coalitions are also assumed to assess the power and influence of member states, considering both pre- and post-enlargement scenarios. We found a rare case when the two indices give different rankings. In the case of the Western Balkan countries' accession, the smaller population member states gain power, presenting an example of the new member paradox. While in a Union of 36 members, every member state loses some of their current power. However, some coalitions are better off with the EU36 enlargement than a EU33 one. |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:arx:papers:2508.08914 |
| By: | Edenhofer, Ottmar; Kalkuhl, Matthias; Stern, Lennart |
| Abstract: | This paper examines how donor countries can be motivated by self-interest to fund emission reductions in low- and middle-income countries (LMICs). While not solving the broader climate cooperation problem, we propose pragmatic measures that do not require global consensus on future climate risks or binding commitments. We quantify the unilateral benefits for donors - reduced climate damages and improved terms-of-trade from lower fossil fuel prices - resulting from financing fossil fuel demand reductions. To address project-level finance inefficiencies, we introduce jurisdictional reward funds targeting governments, which also generate implicit wealth transfers to LMICs. A self-enforcing coalition of fossil fuel importers, such as the European Union and China, could mobilize USD 66 billion annually for mitigation in LMICs, cutting emissions by 1060 Mt CO₂ per year and transferring USD 33 billion per year. LMICs additionally benefit from USD 78 billion in reduced climate damages and USD 19 billion from lower fuel prices. We explore coalition stability, geopolitical considerations, and how broader tax and reward mechanisms could further improve global climate, forest, and health outcomes. |
| Keywords: | Jurisdictional Reward Funds, tax coalitions, fuel market leakage, global public goods, terms-of-trade effects, demand-side climate policy |
| JEL: | H23 H87 F55 Q41 |
| Date: | 2025 |
| URL: | https://d.repec.org/n?u=RePEc:zbw:ifwkwp:324658 |
| By: | Fascione, Luisa; Scheubel, Beatrice; Stracca, Livio; Wildmann, Nadya; Jacoubian, Juan Ignacio |
| Abstract: | The March 2023 banking turmoil has intensified discussions whether social media and the digitalisation of finance have become significant factors in driving severe deposit outflows. We introduce the concept of deposits-at-risk and utilize quantile regressions for disentangling determinants of stressed outflows at the lowest tail of the distribution. For a sample of large banks directly supervised by the ECB, our findings indicate that an increased use of online banking services leads to a small amplification of extreme deposit outflows, but this effect is not further exacerbated by the availability of a mobile banking app. Online banking use and availability of a mobile app do not have a causal effect on deposit volatility in normal times. Finally, social media are impactful only in idiosyncratic cases. JEL Classification: G20, G21, G28 |
| Keywords: | banking regulation, bank runs, deposit outflows, liquidity risk |
| Date: | 2025–08 |
| URL: | https://d.repec.org/n?u=RePEc:ecb:ecbwps:20253092 |
| By: | Phoebe Koundouri; Angelos Alamanos; Giannis Arampatzidis; Stathis Devves; Tatiana Pliakou; Christopher Deranian |
| Abstract: | Achieving climate neutrality in Europe is a critical goal, yet there is no model-based assessment detailing the key factors and assumptions of each Member State's National Energy and Climate Plan (NECP). Filling that gap, we evaluated 35 NECPs and simulated them together in a single energy-emissions model, creating a consolidated European National Commitments (NC) scenario. We built a LEAP (Low Emissions Analysis Platform) model covering energy consumption and production in the residential, industrial, agricultural, transport (terrestrial, maritime, aviation), and services sectors. For each fuel type and end use, we calculated multi�pollutant greenhouse gas emissions. Under the NC scenario, significant emissions reductions emerge across all sectors by 2050, driven by energy efficiency gains and cleaner fuel mixes. However, achieving these reductions depends on fully implementing 35 NECPs, which vary substantially in their timelines, ambition levels, data granularity, and fuel-trade assumptions. We highlight these inconsistencies and offer policy recommendations tailored by sector, country, and policy frameworks, providing critical insights to ensure a feasible, holistic and equitable transition. |
| Keywords: | National Energy and Climate Plans (NECPs), Europe, Energy-Emissions, LEAP, Policy Recommendations |
| Date: | 2025–08–26 |
| URL: | https://d.repec.org/n?u=RePEc:aue:wpaper:2550 |