Abstract The end result of major sporting events has been shown to affect next day stock returns through shifts in investor mood. By studying intraday data during the soccer matches that led to the elimination of France and Italy from the 2010 FIFA World Cup, we test whether mood-related pricing effects already materialize as events unfold. We use data for a cross-listed firm, which allows for a straightforward identification of underpricing. During the matches, the firm’s stock is underpriced by up to 7 basis points in the country that eventually loses. The probability of underpricing increases as elimination becomes more likely.

What does the general public know about banking supervision? What objectives does the public think bank supervisors should pursue? We investigate these issues using a survey among Dutch households. First, we find that the public's knowledge about banking supervision is far from perfect. We also find that respondents often expect more from supervisors than they can realistically achieve. Finally, our findings suggest that better-informed people have more realistic views on banking supervision. Realistic views on banking supervision lead to more prudent financial behavior, which, in turn, contributes to financial stability. Therefore, the communication policies of banking supervisors should aim to improve the public's knowledge about banking supervision.

Is having a foreign background a relevant factor in choosing between payment instruments in consumer point-of-sale transactions after migration? We analyze this question using a unique diary survey in which both participants with a Dutch and a foreign background documented their daily purchases. We present several pieces of evidence suggesting that foreign backgrounds still influence the choice between payment instruments after migration to the Netherlands. For instance, we find that first-generation migrants from a number of countries that can be seen as cash-oriented are more likely to use cash in the Netherlands. At the same time, second-generation migrants have similar payment habits as individuals with a Dutch background. This finding suggests that payment behavior is not passed on between generations, but affected by host country payment habits. Finally, we suggest that, in this context, special information campaigns to increase debit card usage will not have clear net social benefits.

Central banks are increasingly reaching out to the general public to motivate and explain their monetary policy actions. One major aim of this outreach is to ensure accountability and create trust; another is to guide inflation expectations. This article surveys a rapidly growing literature on central bank communication with the public, rather than with the financial markets. We first discuss why such communication matters and is more challenging than communicating with expert audiences. Then we turn to methods: How do central banks try to reach the public, and do they succeed? Next, and importantly, we survey the empirical evidence on the extent to which this new outreach affects inflation expectations. On balance, we see some promise in the potential to inform the public better, but many challenges along the way. (JEL D83, D84, E31, E52, E58, G53)

We study whether floods can affect financial stability through a credit risk channel. Our focus is onthe Netherlands, a country situated partly below sea level, where insurance policies exclude property damages caused by some types of floods. Using geocoded data for close to EUR 650 billion in real estate exposures, we consider possible implications of such floods for bank capital. For a set of 38 adverse scenarios, we estimate that flood-related property damages lead to capital declines that mostly range between 30 and 50 basis points. We highlight how starting-point loan-to-value ratios are one important driver of capital impacts. Our estimates focus on property damages as the main transmission channel and are also subject to a number of assumptions. If climate change continues, more frequent floods or flood-related macrofinancial disruptions may have stronger implications for financial stability than our estimates so far indicate.

Over the last two decades, communication has become an increasingly important aspect of monetary policy. These real-world developments have spawned a huge new scholarly literature on central bank communication—mostly empirical, and almost all of it written in this decade. We survey this ever-growing literature. The evidence suggests that communication can be an important and powerful part of the central bank's toolkit since it has the ability to move financial markets, to enhance the predictability of monetary policy decisions, and potentially to help achieve central banks' macroeconomic objectives. However, the large variation in communication strategies across central banks suggests that a consensus has yet to emerge on what constitutes an optimal communication strategy.