Abstract: Artificial intelligence (AI) has a double-edged relationship with financial stability: it may improve efficiency and risk management, while also creating new vulnerabilities and amplification channels. This paper studies whether market-perceived exposure to AI is reflected in the tails of financial-sector returns, and whether this ...more »

Abstract: General-purpose technologies create large opportunities but make their distribution across firms difficult to assess in real time. We use banks as interpreters of the rise of generative AI by studying lender-specific probability-of-default (PD) estimates for private firms in four large euro-area economies. As public ...more »

Abstract: Holding limits are a central design feature of proposed retail central bank digital currencies (CBDC). While such limits mechanically prevent individuals from exceeding a maximum balance, they may also generate behavioral responses whose directions are a priori unclear. We conducted an incentivized online experiment ...more »