Systemic Risk

For nearly three decades, fiscal policy was the junior partner in macroeconomic management, with independent, inflation-targeting central banks as the primary stabilisation tool. This paper argues that division of labour has broken down, and that fiscal policy has returned not as a temporary crisis response but as a structurally larger, more strategically directed instrument of economic policy. The Global Financial Crisis briefly restored fiscal policy to prominence before a pivot back to austerity; COVID-19 broke that pattern definitively, and the resulting fiscal posture has not reverted to pre-pandemic norms. What is emerging is not a return to twentieth-century Keynesian demand management but a new fiscal paradigm oriented toward long-run strategic state investment -- industrial policy, defence capacity, infrastructure, and technological competitiveness -- with first-order implications for debt sustainability, fiscal-monetary interaction, inflation, and financial markets.

24 July 2026 · 28 min read

Between roughly 1990 and the mid-2010s, the global economy operated under a coherent, mutually reinforcing macroeconomic policy framework -- fiscal discipline, independent inflation-targeting central banks, deep trade globalisation, and open capital markets -- known in its stability dimension as the Great Moderation. This paper argues that the world is not experiencing a sequence of unrelated shocks (the Global Financial Crisis, the eurozone debt crisis, COVID-19, the 2021-2023 inflation surge, the return of great-power competition) but a structural transition from one internally consistent policy regime to another, driven by the accumulation of vulnerabilities beneath decades of apparent stability, the exhaustion of globalisation-driven disinflationary tailwinds, and a shift toward security-maximising statecraft. It traces this evolution chronologically and sets out four long-term scenarios for how the transition may resolve, laying the foundation for the nine research papers that follow in this series.

23 July 2026 · 42 min read

The Euro Area yield curve has completed a full inversion-and-recovery cycle in under three years. The 10-year/2-year spread widened to +0.80 percentage points in July 2022 as markets priced coming ECB hikes, inverted to a trough of -0.58 in July 2023 as the ECB's policy rate outpaced long-term growth and inflation expectations, stayed inverted through mid-2024, then not just normalized but overshot to +0.92 by July 2025 -- steeper than before the hiking cycle began -- before moderating to today's +0.48. As of 16 July 2026, every segment of the curve from 3-month (2.30%) to 30-year (3.65%) slopes upward, with no inverted portion. Placed alongside six other sovereign 10-year yields, today's cross-market picture shows genuinely distinct regimes rather than one global rate level: Japan at 2.65%, Germany at 3.05%, France at 3.74%, Italy at 3.82%, the UK at 4.94%, and Mexico at 9.45%.

19 July 2026 · 5 min read

This is the first installment of an ongoing Global Liquidity Monitor. It is launched under that name deliberately, but scoped honestly: the platform's current data supports a genuine US dollar liquidity read, not yet a truly global one. Two distinct signals are worth tracking together. First, US M2 money supply has clearly accelerated through the first five months of 2026, after a full year of steadier growth -- a shift that coincides directly with the Federal Reserve's December 2025 decision to end quantitative tightening and begin stabilizing its balance sheet around an 'ample reserves' level. Second, the BIS credit-to-GDP gap has been gradually narrowing throughout 2025, moving from -12.59 percentage points in January to -11.54 in October, meaning credit growth has been slowly closing the gap with trend growth even while remaining below it. Neither signal alone would be conclusive; read together, they describe a liquidity environment that is genuinely loosening, gradually, from a below-trend starting point.

16 July 2026 · 5 min read