Two new papers show that stablecoins may transform banking in two ways: by weakening the transaction information that supports bank lending and by increasing banks’ liquidity needs, reserves and exposure to payment shocks.

Two new 2026 working papers show Treasury issuance moves yields much like monetary policy. One isolates the maturity dimension: extending debt maturity steepens the curve, eases credit-risk premia via signaling, boosts near-term investment, and can offset roughly a third of the Fed’s QE-driven yield compression.

As AI agents take on a growing role in financial decision-making, cutting-edge research shows that their stability implications depend critically on whether they learn from experience or reason from context, and on whether they are advising or trading.

Two new papers reveal a striking pattern: macroprudential tightening, whether through countercyclical capital buffers or broader loan-supply restrictions, is being systematically offset through internal capital markets, with multinational firms rerouting credit via parent company debt and banking groups reallocating lending through affiliated nonbank subsidiaries.

The latest research reveals a striking paradox at the heart of AI-driven finance: the same algorithms that make individual traders more profitable and individual lenders more accurate are, in the aggregate, quietly undermining market competition, distorting prices, and synchronizing financial fragility in ways that no single actor intends or even perceives.

A new U.S. proposal to reduce capital surcharges on the largest banks raises different issues, as evidence suggests regulators already tend to intervene in these institutions late, leaving thinner buffers as the last line of defense in a crisis that bail-in alone cannot reliably resolve.

Private credit has evolved from a niche asset class into a $1.7 trillion market primarily serving private equity–backed middle-market firms. Yet its opacity, layered leverage, and deepening ties to banks and insurers are creating systemic blind spots that regulators are only beginning to grapple with.

Financial bubbles are not what most investors think: history shows they are rare, hard to predict, and just as likely to keep inflating as to pop. The reason they form at all has less to do with irrational exuberance than with the inevitable disagreements among investors about what assets are truly worth.

The April 2025 tariff shock punctuated a pre-existing two-year decline in Treasury convenience yields, revealing that foreign investors had already begun questioning the safe-asset status of long-term US bonds, a shift reflected in unprecedented stock-bond covariance patterns and a $47 billion monthly outflow of Treasury holdings.

Financial markets are increasingly pricing the redistribution risk embedded in unfunded fiscal expansions, driving up government borrowing costs, yet the general public remains significantly misinformed about debt levels and understands little about the fiscal trade-offs that lie ahead, creating a dangerous gap between market discipline and democratic accountability.