A new study is the first to comprehensively map three decades of income inequality data within 151 nations around the world. Despite finding that income inequality is worsening for half the world’s people, the study also indicates that effective policy may be helping to bridge the gap in ‘bright spots’ –– in administrative areas that account for around a third of the global population.

This study investigates the under-explored impact of banking deregulation on bank risk-taking. Analyzing China's 2009 deregulation as a natural experiment, we find that deregulated banks significantly increase their risk-taking. Mechanism analysis identifies the bank balance sheet capacity channel: deregulation boosts bank net interest margins, strengthening their financial capacity and thus their risk appetite. While this policy successfully improves long-term credit access for firms in underserved regions, especially smaller ones, it creates a critical trade-off for policymakers between supporting the real economy and safeguarding financial stability.