When risk models hallucinate
Risk model hallucination happens when models are forced to forecast the likelihood of extreme events in cases where they have not been trained with...
How AI can undermine financial stability
As artificial intelligence makes inroads into the financial system, it exacerbates existing channels of instability and creates new ones. This column...
The calming of short-term market fear and its long-term consequences: The central banks’ dilemma
On the use of artificial intelligence in financial regulations and the impact on financial stability
As the financial authorities increase their use of artificial intelligence (AI), micro regulations, such as consumer protection and routine banking...
Artificial intelligence and financial stability
The use of artificial intelligence in the private sector is accelerating, and the financial authorities have no choice but to follow if they are to...
When artificial intelligence becomes a central banker
Artificial intelligence is expected to be widely used by central banks as it brings considerable cost saving and efficiency benefits. However, as this...
The legacy of cryptocurrencies
Crypto-promoters and financial authorities are split on the future of cryptocurrencies. Should crypto join the mainstream or remain in the wilderness...
The case against aggressive government action on crypto
The financial regulators have recently taken an active interest in cryptocurrencies, more than a decade after their law enforcement counterparts did...
What Silicon Valley Bank and Credit Suisse tell us about financial regulations
The downfall of Silicon Valley Bank and Credit Suisse has exposed failures in how we regulate the financial system. This column argues that the...
Lessons from the collapse of Silicon Valley Bank
The collapse of Silicon Valley Bank shows that banks still pose risks. Are they systemic? Jon Danielsson, Robert Macrae, and Nikola Tchouparov write...
The illusion of control: why the financial sector is more vulnerable than ever to a financial crisis
Reforms following the global financial crisis of 2008 were supposed to create a less risky financial world. But has a one-size-fits all approach to...
Research highlight
The Impact of Risk Cycles on Business Cycles: A Historical View
The Review of Financial Studies, 36(7), 2922–2961
The beginning of the end for cryptocurrencies
Cryptocurrencies have enjoyed a remarkable run from obscurity to a trillion dollar valuation in just over a decade. This column argues, however, that...
The illusion of control
Global macroprudential and microprudential regulatory changes since 2008 have been designed to make a repeat of a systemic crisis much less likely...
The Illusion of Control Why Financial Crises Happen, and What We Can (and Can't) Do About It
A challenge to the conventional wisdom surrounding financial risk, providing insight into why easy solutions to control the financial system are...
Choosing a numerical programming language for economic research: Julia, MATLAB, Python or R
Economic researchers can choose between four general purpose programming languages – Julia, MATLAB, Python, and R. This column evaluates the four...
