Blog | Non-bank financial institutions (NBFIs) are on the rise. This blog shows how shifts in their borrowing and investment portfolios constrain financing for euro area firms and affect the transmission of monetary policy. Two trends have diverted financing away from euro area firms in recent years. First, euro area NBFIs have shifted their portfolios towards foreign assets – particularly US equities. Second, banks have channelled more lending to NBFIs outside the euro area. Together, these cross-border flows via NBFIs...

The Council presidency and European Parliament negotiators reached a provisional agreement on a proposal to streamline certain rules regarding artificial intelligence (AI). The proposal forms part of the so-called 'Omnibus VII' legislative package in the EU’s simplification agenda. The package includes proposals for two regulations aiming to simplify the EU’s digital legislative framework and the implementation of harmonised rules on AI. "Today’s agreement on the AI act significantly supports our companies by reducing recurring administrative costs. It ensures legal certainty and a smoother and more...

With the EU Biotech Act marking a major push to strengthen Europe’s biotechnology sector, new OECD research offers a timely check on where the bloc stands. The evidence shows that Europe still lags competitors in biotech start-up creation, patenting and venture capital funding. This blog unpacks the gap and explores how agile regulation and smarter financing tools can help EU policymakers build a more competitive biotechnology start-up ecosystem. Biotechnology has the potential to drive economic growth and high-value job creation,...

Resilience, supervision, and international coordination are essential to safeguarding global financial markets as new AI tools enable attackers. Artificial intelligence is transforming how the financial system copes with vulnerabilities and reacts to incidents. Yet it is also amplifying cyber threats that can undermine financial stability when the offensive capabilities of intruders outpace defenses. IMF analysis suggests that extreme cyber‑incident losses could trigger funding strains, raise solvency concerns, and disrupt broader markets. The financial system relies on shared digital infrastructure that’s highly interconnected, including...

The energy price index rose 12.1% in April, driven largely by crude oil (+8.7%). The non-energy price index increased 3.2%. Agricultural prices gained 1.5% in April, led by food prices (+1.5%); raw materials rose 2.5%, while beverage prices edged up 0.4%. Fertilizer prices surged 14% Metals edged up 1.4% in April, led by aluminum (+6.7%), zinc (+5.7%), and nickel (+5.2%). Precious metals fell 2.7%, weighed down by a decline in gold (-2.8%). The Pink Sheet is the World Bank’s monthly report on commodity...

The Digital Markets Act (DMA) is a key instrument to improve market openness and fairness, competition, and user choice in the EU New challenges posed by generative AI and cloud services need to be addressed External pressure must not compromise the EU’s sovereignty and autonomy to define its rules Effective and proportionate fines essential to ensure deterrence and safeguarding DMA’s effectiveness MEPs are pushing for the Commission’s timely and effective enforcement of the EU’s Digital Markets Act and closer...