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The Single Supervisory Mechanism, loan growth vs. volatility, and granular risk spillovers.
This paper examines how the creation of the Single Supervisory Mechanism (SSM) affected banks’ lending behaviour, risk outcomes and the transmission of banking shocks in the euro area. Using data from 2010 to 2021,...
This paper examines how the ECB and the US Federal Reserve adjust monetary policy in response to climate-related risks, and whether the green transition can proceed without compromising price stability. Using monthly data from 2000 to 2025, the authors show that policy responses vary over time and depend strongly on economic conditions. Physical climate shocks have become increasingly relevant for inflation, especially in high-inflation or high-risk periods, prompting stronger and more persistent responses than transition-related shocks. The findings suggest that climate risks are now an important part of monetary transmission, with reactions shaped by each central bank’s mandate, the inflation environment and broader macroeconomic conditions.
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This paper is part of the Banking Supervision Policy Working Paper Series in the context of the SSM-EUI partnership on SSM Banking Supervision Learning Services. Read more.