A Bundesbank survey shows that individuals living in Germany suffered different types of financial losses during the pandemic. Primarily individuals with lower incomes reported losses in wages and salaries which persisted much longer than other financial losses, such as falling securities prices. The latter were frequently reported at the start of the pandemic, but were subsequently offset at least partly, according to the respondents. It was mainly the more persistent wage and salary losses that changed households’ consumption and saving decisions. Altered saving and consumption behaviour can, in turn, affect the transmission of monetary policy measures.

In a securitisation, a clearly defined and immutable loan portfolio is removed from a bank’s balance sheet and converted into marketable securities – that is the general understanding of how securitisation works. However, contrary to this view, the composition of securitised loan portfolios may change during the life of the securities. A new study explains why this is the case and examines the impact of replenishment on the quality of securitised portfolios. Originators’ reputation and transparency in the securitisation market are identified as key determinants in the selection of loans used to replenish securitised portfolios.

Are asset prices driven by news or by factors unrelated to economic fundamentals, such as market sentiment? In most asset pricing models news play a dominant role, but most empirical applications find only a low explanatory power of news. A new study examines this problem using an extensive time-stamped event database and finds that about half of all high-frequency market movements can be attributed to news.

Implementing a minimum exchange rate regime by buying foreign currency eases monetary conditions domestically and may thus have a direct impact on the inflation rate. However, such foreign currency purchases involve a risky expansion of the central bank’s balance sheet total. A new model can now predict what expansion of the balance sheet a central bank must expect if it wishes to implement a minimum exchange rate in the foreign exchange market.

Climate change is a global challenge that requires international policy coordination. This conclusion is also borne out in a recent study on the macroeconomics implications of carbon pricing. Several different scenarios are considered – different regions introduce carbon pricing schemes unilaterally or in cooperation, and in the presence or absence of border adjustment schemes.