Rising Rates May Trigger Financial Instability, Complicating Fight Against Inflation

February 13, 2025-Banking systems are largely insulated from inflation, but vulnerabilities at some banks could lead to tradeoffs between containing inflation and protecting financial stability
Before the pandemic, investors worried about how persistently low inflation and interest rates would crimp bank profits. Paradoxically, they also worried about bank profitability when post-COVID reopening sent inflation and central bank interest rates soaring.

The failure of Silicon Valley Bank and other US lenders in early 2023 appeared to validate these fears.

Our new research on the relationship between inflation and bank profitability helps us make sense of these concerns. Most banks are largely insulated from shifts in inflation-the exposure of income and expenses tend to offset each other. Yet some have significant inflation exposures, which may lead to financial instability if concentrated losses lead to wider panics in the banking sector.

As several major central banks are reassessing their monetary policy frameworks in the aftermath of the post-pandemic inflation surge, a deeper understanding of the links between inflation and bank profitability can help design better monetary policy frameworks.

WTO issues new edition of World Tariff Profiles

July 7, 2025-The WTO published on 7 July the 2025 edition of World Tariff Profiles, which provides comprehensive data on the tariffs and non-tariff measures imposed by over 170 economies. It is a joint publication of the WTO, the International Trade Centre (ITC) and UN Trade and Development (UNCTAD).
The publication provides summary tables listing the average "bound" (maximum) tariffs and applied tariffs for each economy for both agricultural and non-agricultural products as of end-2024.

Flow Traders-Tokenization in Capital Markets: A Market Maker's Perspective

July 3, 2025-Tokenization unlocks efficiencies like instant settlement, 24/7 trading, and fractional ownership-but real-world adoption depends on solving infrastructure and regulatory challenges, not just technology.
Market makers face key friction points in tokenized markets: fragmented liquidity requiring pre-funding across blockchains, lack of product-market fit without real demand, and operational complexity from 24/7 trading.