Banking systems’ long-term systemic risk has grown – ECB paper

Assets became safer but banking systems’ failures were more harmful, analysis finds

european-central-bank
The European Central Bank

Bank assets have become less risky since 1870, but systemic banking risk has grown, a working paper published by the European Central Bank finds.

In The shifts and the shocks: bank risk, leverage, and the macroeconomy, Dmitry Kuvshinov, Björn Richter and Kaspar Zimmermann examine data from 17 advanced economies from 1870 to 2016.

They find that bank assets in these economies have become significantly less risky in the period that they study. But the authors also find that the losses on those

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