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Elisa Reinhold
- 24 November 2025
- FINANCIAL STABILITY REVIEW - BOXFinancial Stability Review Issue 2, 2025Details
- Abstract
- The rapid expansion of stablecoins has drawn widespread attention and raised potential financial stability concerns. The risks stem from inherent structural weaknesses, specifically the potential for de-pegging, compounded by growing interconnections with traditional finance. Major stablecoin issuers now manage asset holdings comparable to the world’s largest money market funds and rank among the top acquirers of US Treasury bills in recent months. Consequently, a run on stablecoins could trigger fire sales, potentially disrupting safe-asset markets. Furthermore, continued growth may drive retail deposit outflows, increasing banking disintermediation risks. While resulting wholesale inflows might partially offset these retail outflows, this type of funding is typically less stable, leaving banks more vulnerable to shocks. Nevertheless, financial stability risks from stablecoins remain limited for the euro area. The primary source of risk stems from discrepancies in stablecoin regulation globally, allowing for cross-border regulatory arbitrage. Therefore, it is vital that regulatory frameworks are further aligned at a global level.
- JEL Code
- G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
G15 : Financial Economics→General Financial Markets→International Financial Markets
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 21 May 2025
- FINANCIAL STABILITY REVIEW - ARTICLEFinancial Stability Review Issue 1, 2025Details
- Abstract
- The market capitalisation of crypto-assets has surged recently, fuelled by positive and broadening investor interest, including from traditional finance. Several key financial stability risks associated with crypto-assets have been identified in past editions of this publication and by the Financial Stability Board. They include, among others, interconnectedness with traditional finance, market volatility and lack of transparency, liquidity and maturity mismatches, and leverage and concentration. This special feature focuses on the first two. For these sources, risks for financial stability in the euro area appear limited, but there are signs that interconnectedness between the crypto-asset ecosystem and the traditional financial sector is strengthening. As it does, new channels of potential contagion are opening up, warranting closer monitoring. At the same time, euro area households’ direct exposures are slowly rising from low levels. Data gaps, especially for the crypto exposures of non-banks and leverage, pose challenges both for monitoring and for assessing the scale of these sources of systemic risk. It is therefore essential that these data gaps be closed and that responsible authorities remain vigilant. Although the EU has established a stringent regulatory framework, global regulation is either fragmented or absent, raising the risk of regulatory arbitrage and contagion from abroad.
- JEL Code
- G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
G51 : Financial Economics
- 4 February 2016
- OCCASIONAL PAPER SERIES - No. 168Details
- Abstract
- Euro area countries exhibited modest convergence prior to the financial crisis and diverged thereafter. Such divergence has been examined from many angles, and various narratives of the crisis have developed. Surprisingly, the gradual transformation of the economic structures of euro area countries over the last 15-20 years has, however, received less attention. This paper brings together several strands of evidence - both macro and micro - on such economic transformation. It makes three contributions. First, profound changes are found in the allocation of countries
- JEL Code
- E01 : Macroeconomics and Monetary Economics→General→Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
J21 : Labor and Demographic Economics→Demand and Supply of Labor→Labor Force and Employment, Size, and Structure
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence