https://hdl.handle.net/10419/336264 Fri, 23 Oct 2026 06:51:11 GMT 2026-10-23T06:51:11Z https://hdl.handle.net/10419/336427 Title: Crypto assets and CBDCs in Latin America and the Caribbean: Opportunities and risks Authors: Bespalova, Olga; Appendino, Maximiliano; Bhattacharya, Rina; Clevy Aguilar, Jean Francois; Geng, Nan; Komatsuzaki, Takuji; Lesniak, Justin; Lian, Weicheng; Marcelino, Sandra; Villafuerte, Mauricio; Yakhshilikov, Yorbol Abstract: After providing a general overview of the nature, pros, and cons of crypto assets and CBDCs, this paper focuses on documenting their recent experience in LAC. The region records a high interest in unbacked crypto assets and stablecoins and its authorities' policy responses have varied substantially, ranging from the introduction of Bitcoin as legal tender in El Salvador to their prohibition in many other countries worried about their impact on financial stability, currency/asset substitution, tax evasion, corruption, and money laundering. This paper also describes briefly the results of a survey on CBDCs' introduction plans and crypto assets regulation. Finally, this paper presents some general lessons and policy recommendations for the region on the regulation of crypto assets, digital currencies and cross-border payments, and on the potential introduction of CBDCs. Wed, 01 Jan 2025 00:00:00 GMT https://hdl.handle.net/10419/336427 2025-01-01T00:00:00Z https://hdl.handle.net/10419/336436 Title: Banks in an environment of higher interest rates Authors: Sánchez Serrano, Antonio Abstract: The core financial intermediation function of banks, providing loans and taking deposits, is closely related to the level of interest rates. We construct a simplified balance sheet of a representative bank and assess how increases in interest rates may affect its profitability (through changes in net interest income, the fair value of financial assets, and credit losses) as well as the market value of its assets and liabilities (i.e., market value of equity). Using a sample of 103 EU banks from the 2022 EBA Transparency Exercise, we find that, mainly on account of higher net interest income, higher interest rates increase bank profits, with an inverted-U shaped curve over time. There is however a non-negligible share of banks reporting losses, mainly because of their high share of loans at fixed-rates or of debt securities at fair value. Looking at the market value of equity, it declines for most of the banks in our sample, confirming the negative relation between interest rates and banks' assets and liabilities. Wed, 01 Jan 2025 00:00:00 GMT https://hdl.handle.net/10419/336436 2025-01-01T00:00:00Z https://hdl.handle.net/10419/336434 Title: The interdependencies of Canadian financial institutions: An application to climate transition shocks Authors: Bruneau, Gabriel; Ojea-Ferreiro, Javier; Plummer, Andrew; Tremblay, Marie-Christine; Witts, Aidan Abstract: We develop a methodological framework to analyse systemic risks capturing both direct and indirect (or systemic) effects. We apply it to climate transition shocks in the context of Canada. We use scenario analysis to capture the direct effects-in the form of credit, market and liquidity risks-on public and private assets and derivatives portfolios of deposit-taking institutions, life insurance companies, pension funds and investment funds. We extend an agent-based model to capture the indirect-or systemic effects-via an interconnected financial system. The model assumes behavioural and regulatory rules and includes transmission channels such as cross-holding positions, business similarities, common exposures and fire sales. We find that delayed climate transition scenario may only modestly transmit through the Canadian financial system, but systemic interconnections amplify these effects. Wed, 01 Jan 2025 00:00:00 GMT https://hdl.handle.net/10419/336434 2025-01-01T00:00:00Z https://hdl.handle.net/10419/336422 Title: Nestedness and systemic risk in financial networks Authors: Alexandre, Michel; Xavier, Felipe Jordão; Silva, Thiago Christiano; Rodrigues, Francisco Aparecido Abstract: In this paper, we explore the relationship between node nestedness contribution and network stability in financial networks. We rely on data from the Brazilian interbank market. For each bank in the network, we computed the individual nestedness contribution (INC), along with two measures of systemic risk: systemic impact (SI) and systemic vulnerability (SV). The INC is computed considering the different roles played by the banks: lender and borrower. We found that borrowing banks with a higher INC would cause more damage to the network if they were hit by a shock - i.e, they have a higher SI. Moreover, lending banks with a higher INC are more vulnerable to shocks on the network. Wed, 01 Jan 2025 00:00:00 GMT https://hdl.handle.net/10419/336422 2025-01-01T00:00:00Z