What does financial stability have to do with cycling and zombies? How has the third wave of the pandemic affected the financial system? What risks lie ahead? Our host Katie Ranger discusses these questions with our financial stability experts Tamarah Shakir and John Fell on The ECB Podcast. The views expressed are those of the speakers and not necessarily those of the European Central Bank. Published on 16 June 2021 and recorded on 1 June 2021. In this episode: 00:58 – How the financial system has fared during the third wave How the financial stability bicycle is doing, how stabilisers have helped to preserve financial stability, what the risks are that lie ahead during the recovery. 06:30 – Economic divergence across sectors and countries Why countries and sectors were affected differently during the pandemic, why economic divergence is an issue for financial stability and why fiscal policy is best suited to address divergences between sectors and countries. 11:27 – Risk appetite in the markets and bitcoin How markets and investors have behaved during the third wave of the pandemic, why investors’ risk appetite has increased over the last six months and why this is a concern for financial stability. 17:38 – Zombie firms and financial stability What zombie firms are, why they could benefit from policy support measures during the pandemic, what zombie firms mean for financial stability. 21:18 – Must-watches and must-reads on financial stability What our experts suggest as entertaining must-watches and must-reads to get started on financial stability. Further reading: Financial Stability Review https://www.ecb.europa.eu/pub/financial-stability/fsr/html/index.en.html European Central Bank www.ecb.europa.eu You can also listen to The ECB Podcast on SoundCloud, Spotify, Deezer, Stitcher, YouTube, Amazon Music and many more: https://pod.link/ecbpodcast