<
 
 
 
 
×
>
hide You are viewing an archived web page, collected at the request of Publications Office of the European Union using Archive-It. This page was captured on 14:34:16 Aug 27, 2021, and is part of the European Union collection. The information on this web page may be out of date. See All versions of this archived page. Loading media information
Search Options
Home Media Explainers Research & Publications Statistics Monetary Policy The €uro Payments & Markets Careers
Suggestions
Sort by

Interview

Looking to the autumn

Any adjustment we make to the PEPP within this pandemic period is within the philosophy of maintaining favourable financing conditions, says Chief Economist Philip R. Lane. He adds that while growth in the second quarter came in well ahead of our projections, there also are some headwinds.

Interview
ACCOUNT 26 August 2021

Account of the July monetary policy meeting

Governing Council members agreed to align the forward guidance on interest rates with the new inflation target, the account showed. They also agreed to continue pandemic asset purchases at a significantly higher pace in the third quarter than in the first months of the year.

Account of July meeting
INTERVIEW 21 August 2021

The greatest challenge of the 21st century

In an interview on climate change and inflation, Executive Board member Isabel Schnabel stresses that the ECB is obliged to act on climate change to fulfill its mandate. In spite of rising inflation, there remain concerns about medium-term inflation being too low rather than too high.

Interview
EXPLAINERS 28 July 2021

What is the PEPP?

The pandemic emergency purchase programme (PEPP) was introduced in March 2020 to counter the economic impact of the coronavirus crisis. It lowers borrowing costs and increases bank lending in the euro area to help people and businesses to weather the crisis. But how does it work?

Explainer
26 August 2021
Vortrag von Isabel Schnabel, Mitglied des Direktoriums der EZB, bei der regelmäßigen Ökonomenrunde des Bundesministeriums der Finanzen
24 August 2021
Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Annual Congress of the European Economic Association (EEA)
Annexes
24 August 2021
22 July 2021
Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Frankfurt am Main, 22 July 2021
14 July 2021
Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the virtual Financial Statements series hosted by the Peterson Institute for International Economics
Annexes
14 July 2021
11 July 2021
Speech by Christine Lagarde, President of the ECB, at the International Climate Change Conference in Venice
25 August 2021
Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Balazs Koranyi and Frank Siebelt
21 August 2021
Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Carla Neuhaus on 17 August and published on 20 August 2021
English
OTHER LANGUAGES (1) +
Select your language
29 July 2021
Interview with Luis de Guindos, Vice-President of the ECB, conducted by Frank Wiebe and Jan Mallien
English
OTHER LANGUAGES (1) +
Select your language
29 July 2021
Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Federico Fubini
English
OTHER LANGUAGES (1) +
Select your language
13 July 2021
Interview with Christine Lagarde, President of the ECB, conducted by Martin Arnold on 11 July 2021
19 August 2021
Philip R. Lane, Member of the Executive Board of the ECB
Details
Summary
Our revised forward guidance is a fundamental step in fulfilling our commitment to 2% inflation, writes Chief Economist Philip R. Lane. He also discusses the three conditions that should be met before interest rates are raised.
27 July 2021
Blog post by Fabio Panetta, Member of the Executive Board of the ECB
English
OTHER LANGUAGES (1) +
Select your language
Details
Summary
If we make the recovery fund work and if we embed the lessons from the pandemic in the EMU governance framework, we can emerge from the crisis with a stronger economy and greater social and political cohesion, says Executive Board member Fabio Panetta in The ECB Blog.
14 July 2021
Blog post by Fabio Panetta, Member of the Executive Board of the ECB
Details
Summary
We have decided to launch a project to prepare for possibly issuing a digital euro. A digital euro will be successful if it adds value for people, merchants and financial intermediaries in the euro area, explains Executive Board member Fabio Panetta in The ECB Blog.
11 May 2021
Blog post by Fabio Panetta, Member of the Executive Board of the ECB
Details
Summary
Climate change and sustainability are global challenges that require global solutions, especially in the financial sector, writes Executive Board member Fabio Panetta. We need international disclosure standards and principles to categorise sustainable activities.
1 April 2021
Blog post by Philip R. Lane, Member of the Executive Board of the ECB
Details
Summary
The recent volatility of inflation can largely be attributed to the nature of the pandemic shock, writes Chief Economist Philip R. Lane. The increase in inflation during early 2021 does not constitute the basis for a sustained shift in inflation dynamics.
27 August 2021
WORKING PAPER SERIES - No. 2586
Details
Abstract
We investigate, in the case of Germany, the positive correlation between the cyclical components of the corporate saving glut in the non-financial corporate sector and the current account surplus from a capital account perspective. Employing sign restrictions, our findings suggest that mostly labor supply, world demand and financial friction shocks account for the joint dynamics of excess corporate saving and the current account surplus. Household saving shocks, by contrast, cannot explain the correlation. We conclude that, explained through these factors, the corporate saving glut is an important driver of the cyclical component of the current account.
JEL Code
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
F32 : International Economics→International Finance→Current Account Adjustment, Short-Term Capital Movements
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
25 August 2021
WORKING PAPER SERIES - No. 2585
Details
Abstract
Fed's monetary policy announcements convey a mix of news about different kinds of conventional and unconventional policies and about the economy. Financial market responses to these announcements are very leptokurtic: often tiny, but sometimes large. I estimate the underlying structural shocks exploiting this feature of the data. I find standard monetary policy, Odyssean forward guidance, large scale asset purchases and Delphic forward guidance, and estimate their effects.
JEL Code
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
25 August 2021
OCCASIONAL PAPER SERIES - No. 260
Details
Abstract
The Basel Committee on Banking Supervision (BCBS) framework used to identify global systemically important banks (G-SIBs) is based on banks’ balance sheet information, leaving information derived from market data untapped. Among the most widely used market-based systemic risk measures, Adrian and Brunnermeier’s (2016) Delta-Conditional Value at Risk (ΔCoVaR) best captures the system-wide loss-given-default (sLGD) and conditional impact concepts underlying the BCBS GSIB methodology. In this paper we investigate, using a global sample of the largest banks, whether a score based on ΔCoVaR could be useful for ranking G-SIBs or for calibrating an alternative G-SIB indicator weighting scheme. In our first analysis we find that the ΔCoVaR score is positively correlated with all five of the systemic importance categories of the BCBS framework. However, considerable information/noise with regard to the ΔCoVaR score remains unexplained. Before more is known about this residual, a score based on ΔCoVaR is difficult to interpret and is inappropriate for identifying G-SIBs in a policy context. Besides, we find that a ranking based on ΔCoVaR is subject to substantial variability over time and across empirical specifications. In our second analysis we use ΔCoVaR to place the current static weighting scheme for G-SIB indicators on an empirical footing. To do this we regress ΔCoVaR on factors derived from the G-SIB indicators. This approach allows us to focus on the part of ΔCoVaR which can be explained by balance sheet information which alleviates the identified issues of interpretability and variability. The derived weights are highest for the cross-jurisdictional activity (43%) and size (27%) categories. We conclude that ΔCoVaR is not suitable for use as an alternative G-SIB score but could be useful for policymakers to pursue an empirically grounded weighting scheme for the existing G-SIB indicators.
JEL Code
G20 : Financial Economics→Financial Institutions and Services→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
23 August 2021
SURVEY OF MONETARY ANALYSTS
9 August 2021
WORKING PAPER SERIES - No. 2584
Details
Abstract
We compare the findings of central bank researchers and academic economists regarding the macroeconomic effects of quantitative easing (QE). We find that central bank papers find QE to be more effective than academic papers do. Central bank papers report larger effects of QE on output and inflation. They also report QE effects on output that are more significant, both statistically and economically, and they use more positive language in the abstract. Central bank researchers who report larger QE effects on output experience more favorable career outcomes. A survey of central banks reveals substantial involvement of bank management in research production.
JEL Code
A11 : General Economics and Teaching→General Economics→Role of Economics, Role of Economists, Market for Economists
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
9 August 2021
WORKING PAPER SERIES - No. 2583
Details
Abstract
The link between US labor cost and price inflation has weakened notably over the past three decades. In this paper we document this decline and analyse potential contributing factors. We consider four important trends that have shaped the US economy of late: (i) improved anchoring of inflation expectations; (ii) the changing constellation of shocks hitting the economy; (iii) increased trade integration and (iv) rising firm market power. We find that the improved anchoring of inflation expectations has played a particularly relevant role but also that the latter two trends offer promising avenues to understand the decline in pass-through from labor cost to price inflation. Our results also bring supportive evidence to the view taken by the FED in the context of its monetary policy strategy review that a robust job market can be sustained without causing an outbreak of inflation.
JEL Code
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
6 August 2021
WORKING PAPER SERIES - No. 2582
Details
Abstract
This paper investigates the impact of ECB communication of its assessment of the economic outlook on ex-ante inflation uncertainty and sheds light on how central bank information shocks operate. The paper finds that ECB communication of new outlook information not only reduces professional forecasters’ disagreement (i.e., the cross-sectional dispersion of their average point forecasts of inflation) but also makes forecasters less uncertain about their own beliefs, thus reducing ex-ante average individual uncertainty. By combining and exploiting these types of ex-ante inflation uncertainty, results suggest that central bank information acts as a “coordination device” able to influence opinions and actions. Most importantly, it generates a “stabilizer effect” by substantially decreasing the dispersion among the inflation point forecasts, which converge towards their unconditional aggregate mean. The results of this paper not only help to explain the impact of new central bank information, but they are also useful for policymakers to define a communication strategy that attenuates ex-ante inflation uncertainty in the most effective way.
JEL Code
D83 : Microeconomics→Information, Knowledge, and Uncertainty→Search, Learning, Information and Knowledge, Communication, Belief
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E65 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Studies of Particular Policy Episodes
G14 : Financial Economics→General Financial Markets→Information and Market Efficiency, Event Studies, Insider Trading
6 August 2021
WORKING PAPER SERIES - No. 2581
Details
Abstract
This paper shows how the combined endogenous reaction of banks and investment funds to an exogenous shock can amplify or dampen losses to the financial system compared to results from single-sector stress testing models. We build a new model of contagion propagation using a very large and granular data set for the euro area. Based on the economic shock caused by the Covid-19 outbreak, we model three sources of exogenous shocks: a default shock, a market shock and a redemption shock. Our contagion mechanism operates through a dual channel of liquidity and solvency risk. The joint modelling of banks and funds provides new insights for the assessment of financial stability risks. Our analysis reveals that adding the fund sector to our model for banks leads to additional losses through fire sales and a further depletion of banks’ capital ratios by around one percentage point.
JEL Code
D85 : Microeconomics→Information, Knowledge, and Uncertainty→Network Formation and Analysis: Theory
G01 : Financial Economics→General→Financial Crises
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
L14 : Industrial Organization→Market Structure, Firm Strategy, and Market Performance→Transactional Relationships, Contracts and Reputation, Networks
5 August 2021
ECONOMIC BULLETIN
5 August 2021
ECONOMIC BULLETIN - ARTICLE
Economic Bulletin Issue 5, 2021
Details
Abstract
This article details the rationale and thinking behind the ECB’s new monetary policy strategy, which was published on 8 July 2021, and its main elements. While the mandate is conferred upon the ECB by the Treaties, the ECB has to devise its monetary policy strategy. This strategy sets out how to achieve the primary objective of maintaining price stability in the euro area, referring to an appropriate set of monetary policy instruments, indicators and intermediate targets, as well as how to take into account other considerations without prejudice to price stability. A monetary policy strategy serves two main purposes: first, it provides policymakers with a coherent analytical framework that maps actual or expected economic developments into policy decisions, second, it serves as a vehicle for communicating with the public. The ECB’s monetary policy strategy was last reviewed in 2003 and the changes that have since occurred to the economic and financial backdrop as well as to the predominant policy challenges warranted an update.
JEL Code
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination

Interest rates

Marginal lending facility 0.25 %
Main refinancing operations (fixed rate) 0.00 %
Deposit facility − 0.50 %
18 September 2019 Past key ECB interest rates

Inflation rate

Inflation dashboard

Reference rates

USD US dollar 1.1761
JPY Japanese yen 129.59
GBP Pound sterling 0.85703
CHF Swiss franc 1.0796
Last update: Friday, 27 August 2021 Euro foreign exchange rates