PODCAST
28 January 2023
What does it take to change a currency?
Croatia joined the euro area on 1 January 2023. What did people, businesses and national authorities do to ensure a smooth transition to the euro? Our host Katie Ranger looks at the currency changeover with expert Patricia Roa Tejero on The ECB Podcast.
The ECB Podcast
STATISTICS
24 January 2023
Narrowing the climate data gap
As part of our climate agenda, we have published an initial set of climate-related indicators to analyse how climate change will affect the financial sector. This is part of our efforts to narrow the climate data gap and monitor the green transition.
Climate change-related indicators
EVENT
26 January 2023
We are now on Kahoot!
What is the ECB’s main task? How many people use the euro? Test your knowledge of central banking, banking supervision, money and inflation with four new quizzes on Kahoot!
Play now- 27 January 2023
- EURO AREA ECONOMIC AND FINANCIAL DEVELOPMENTS BY INSTITUTIONAL SECTOR (FULL)
- 27 January 2023
- MONETARY DEVELOPMENTS IN THE EURO AREAAnnexes
- 27 January 2023
- MONETARY DEVELOPMENTS IN THE EURO AREA
- 24 January 2023
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 24 January 2023
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 24 January 2023
- PRESS RELEASE
- 19 January 2023
- MONETARY POLICY ACCOUNTRelated
- 15 December 2022
- MONETARY POLICY DECISIONEnglishOTHER LANGUAGES (23) +
- 23 January 2023
- Speech by Christine Lagarde, President of the ECB, at the Deutsche Börse Annual Reception in Eschborn
- 23 January 2023
- Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European ParliamentRelated
- 10 January 2023
- Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the International Symposium on Central Bank Independence, Sveriges Riksbank, Stockholm
- 6 January 2023
- Presentation by Philip R. Lane, Member of the Executive Board of the ECB, in panel discussion “Global Economic Outlook” organised by the National Association for Business Economics (NABE) at 2023 ASSA Annual Meeting, New Orleans
- 15 December 2022
- Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Frankfurt am Main, 15 December 2022EnglishOTHER LANGUAGES (23) +Related
- 24 January 2023
- Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Andreas Kröner, Jan Mallien and Frank Wiebe
- 17 January 2023
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Martin Wolf on 12 January 2023
- 31 December 2022
- Interview with Christine Lagarde, President of the European Central Bank, conducted by Marina Klepo on 19 December 2022
- 27 December 2022
- Interview with Luis de Guindos, Vice-President of the ECB, conducted on 16 December 2022
- 24 December 2022
- Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Gerald Braunberger and Christian Siedenbiedel on 16 December 2022
- 27 January 2023
- The ECB’s main building in Frankfurt stands on a site linked to the atrocities of the Holocaust. On International Holocaust Remembrance Day, we affirm that tyranny and state injustice must never again prevail. Building European unity is a cornerstone of this commitment.EnglishOTHER LANGUAGES (23) +
- 18 January 2023
- Hit by multiple shocks, the corporate sector has increased its debt over recent years. The ECB Blog shows that strained balance sheets could significantly depress firms’ investment in the coming years with negative implications for innovation and growth.Details
- JEL Code
- E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
F34 : International Economics→International Finance→International Lending and Debt Problems
G31 : Financial Economics→Corporate Finance and Governance→Capital Budgeting, Fixed Investment and Inventory Studies, Capacity
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
- 5 January 2023
- Trading in unbacked digital assets should be treated by regulators like gambling.Related
- 30 November 2022
- 4 January 2023
- Borrowing has become more expensive for governments. But despite rising interest rates, government debt can remain on a sound path. The ECB Blog discusses what constitutes a favourable balance between debt costs and economic growth.Details
- JEL Code
- E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
H30 : Public Economics→Fiscal Policies and Behavior of Economic Agents→General
E60 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→General
- 20 December 2022
- The ECB has gauged bank resilience to interest rate shocks under different macroeconomic scenarios. ECB Vice-President Luis de Guindos and Chair of the ECB’s Supervisory Board Andrea Enria walk us through the findings.
- 25 January 2023
- WORKING PAPER SERIES - No. 2769Details
- Abstract
- Differences in labour market institutions and regulations between countries of the monetary union can cause divergent responses even to a common shock. We augment a multi-country model of the euro area with search and matching framework that differs across Ricardian and hand-to-mouth households. In this setting, we investigate the implications of cross-country heterogeneity in labour market institutions for the conduct of monetary policy in a monetary union. We compute responses to an expansionary demand shock and to an inflationary supply shock under the Taylor rule, asymmetric unemployment targeting, and average inflation targeting. For each rule we distinguish between cases with zero weight on the unemployment gap and a negative response to rising unemployment. Across all rules, responding to unemployment leads to lower losses of employment and higher inflation. Responding to unemployment reduces cross-country differences within the monetary union and the differences in consumption levels of rich and poor households.
- JEL Code
- E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
- 25 January 2023
- WORKING PAPER SERIES - No. 2768Details
- Abstract
- This paper compares within-sample and out-of-sample fit of a DSGE model with rational expectations to a model with adaptive learning. The Galí, Smets and Wouters model is the chosen laboratory using quarterly real-time euro area data vintages, covering 2001Q1–2019Q4. The adaptive learning model obtains better within-sample fit for all vintages used for estimation in the forecast exercise and for the full sample. However, the rational expectations model typically predicts real GDP growth better as well as jointly with inflation. For the marginal inflation forecasts, the same holds for the inner quarters of the forecast horizon, while the adaptive learning model predicts better for the outer quarters.
- JEL Code
- C11 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Bayesian Analysis: General
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
C52 : Mathematical and Quantitative Methods→Econometric Modeling→Model Evaluation, Validation, and Selection
C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods
E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications
- 24 January 2023
- WORKING PAPER SERIES - No. 2767Details
- Abstract
- We develop a measure of overall financial risk in China by applying machine learning techniques to textual data. A pre-defined set of relevant newspaper articles is first selected using a specific constellation of risk-related keywords. Then, we employ topical modelling based on an unsupervised machine learning algorithm to decompose financial risk into its thematic drivers. The resulting aggregated indicator can identify major episodes of overall heightened financial risks in China, which cannot be consistently captured using financial data. Finally, a structural VAR framework is employed to show that shocks to the financial risk measure have a significant impact on macroeconomic and financial variables in China and abroad.
- 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
C65 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Miscellaneous Mathematical Tools
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
F44 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Business Cycles
G15 : Financial Economics→General Financial Markets→International Financial Markets
- 24 January 2023
- WORKING PAPER SERIES - No. 2766Details
- Abstract
- This paper provides an analysis of the impact of the COVID-19 pandemic on exporting firms, fo-cusing on the role of supply bottlenecks. Based on monthly transaction-level data for the universe of French exporters over the period January 2020-December 2021, we find that participation in global value chains increased firms’ vulnerability to the COVID-19 shock, in terms of both export perfor-mance and probability of survival in the export market, the negative impact of supply disruptions being higher for relatively more downstream firms. At the same time, the results suggest that export-ing firms benefited from sourcing of core inputs from different countries, supporting the hypothesis that diversification in global value chains fosters supply-chain resilience.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
F14 : International Economics→Trade→Empirical Studies of Trade
F61 : International Economics→Economic Impacts of Globalization→Microeconomic Impacts
- 24 January 2023
- OTHER PUBLICATIONAnnexes
- 24 January 2023
- OTHER PUBLICATION
- 23 January 2023
- WORKING PAPER SERIES - No. 2765Details
- Abstract
- Economic literature suggests that banks change their dividend payouts for three main reasons. They may be willing to signal good future profitability to shareholders to address information asymmetry, or use dividends to mitigate the agency costs, or could come under pressure from prudential supervisors and regulators to retain earnings. The COVID-19 pandemic led to introduction of sector-wide recommendation by regulators to suspend dividend payouts in view of prevailing large uncertainty. Using a panel data approach for two samples of listed and unlisted European banks, this paper provides evidence that, over a decade and a half preceding the pandemic, bank dividend payouts were adjusted in line with the three motivations found in the literature. The results are robust to selection of alternative variables representing these motivations. Banks are found not to discount expectations about future economic conditions or their own profitability when making payouts. Simulations shown in the paper suggest that, in the absence of supervisory recommendations, banks would likely have reduced the payouts only slightly in the first year of the pandemic.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G35 : Financial Economics→Corporate Finance and Governance→Payout Policy
- 23 January 2023
- WORKING PAPER SERIES - No. 2764Details
- Abstract
- The EU is revising its emissions trading system (ETS) and plans to impose a carbon border adjustment mechanism (CBAM) on imports. We evaluate the efficacy of the ETS retrospectively and its anti-competitive effects. We find that the ETS contributed to cut greenhouse gas (GHG) emissions in the EU by 2-2.5 percentage points per year; pricier emissions and more stringent caps accelerated the EU greening process. However, some carbon leakages occurred as declining emissions in regulated industries within the EU were counterbalanced by an intensification elsewhere. Moreover, it burdened companies in regulated industries. For a comparable rise in the emission intensity of production, gross output of companies located in the EU drops more than output of companies outside the EU. In addition, the choice of purchasing high-emission inputs from within the EU translates into a competitive disadvantage for companies located within the EU. The large drop in F-type output when emissions intensity rises might signal their enhanced ability to relocate the production of high-carbon footprints intermediates to non-regulated regions. Outsourcing helps dodging the EU green regulation and the strategy becomes increasingly appealing as the sectoral coverage of the ETS is extended. A careful joint design of the CBAM and the ETS becomes thus crucial to avoid that applying the CBAM to a restricted list of imports while expanding the ETS coverage puts the EU at greater risk of carbon leakages without concretely reducing global emissions.
- JEL Code
- Q52 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Pollution Control Adoption Costs, Distributional Effects, Employment Effects
Q58 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Government Policy
- 17 January 2023
- OTHER PUBLICATION
- 16 January 2023
- SURVEY OF MONETARY ANALYSTS
- 16 January 2023
- RESEARCH BULLETIN - No. 103Details
- Abstract
- A safe asset is of high credit quality, retains its value in bad times and is traded in liquid markets. We show that bonds issued by the European Union (EU) are widely considered to be of high credit quality, and that their yield spread over German Bunds remained contained during the 2020 COVID-19 pandemic recession. Recent issuances under the EU’s SURE and NGEU initiatives helped improve EU bonds' market liquidity from previously low levels, also reducing liquidity risk premia. Eurosystem purchases and holdings of EU bonds did not impair market liquidity. Currently, one obstacle to EU bonds achieving a genuine euro-denominated safe asset status, approaching that of Bunds, lies in the one-off, time-limited nature of the EU’s COVID-19-related policy responses.
- JEL Code
- G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
H63 : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
- 13 January 2023
- OTHER PUBLICATIONAnnexes
- 13 January 2023
- OTHER PUBLICATION
- 13 January 2023
- OTHER PUBLICATION
Related - 12 January 2023
- ECONOMIC BULLETIN - No. 8
- 12 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- This box examines the information that the euro area bank lending survey (BLS) provides on future growth in loans to firms and households for house purchase in the euro area. The survey has proved to be invaluable for assessing the passthrough of monetary policy to borrowers via banks, for obtaining early information on turning points in lending conditions, and for understanding changes in loan demand and lending conditions during exceptional periods, such as the COVID-19 (coronavirus) pandemic and the Russian war in Ukraine. First, simple cross-correlations reveal a strong relation between BLS indicators and actual loan growth several quarters ahead. Second, BLS indicators help improve loan forecasts. In terms of loans to firms, the credit standards and loan demand reported in the BLS provide additional information that can be used when forecasting lending, while for housing loans, forecasts are improved by taking into account reported demand in particular. Finally, bank-level data confirm that BLS responses also reveal information on loan developments at the individual bank level. Overall, recent developments regarding BLS credit standards and loan demand point to a deceleration of growth in loans to firms and households in the coming quarters.
- JEL Code
- E4 : Macroeconomics and Monetary Economics→Money and Interest Rates
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 12 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- This box describes the liquidity conditions and the ECB’s monetary policy operations during the fifth and sixth maintenance periods of 2022, from 27 July to 1 November.
- JEL Code
- E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→General
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
- 12 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- This box looks at the link between firms’ financing conditions and the euro area business cycle. For information on financing conditions of firms, the box uses results from the Survey on the Access to Finance of Enterprises (SAFE). Monetary policy is shown to affect changes in firms’ financing gaps – the difference between the change in demand for and the change in the availability of external financing – as well as their expectations about future availability of finance. At the current juncture, firms report increasing financing gaps and a deterioration in their expectations about the availability of finance in the period ahead. Such responses from firms are associated with stronger concerns about finance at the firm level. Moreover, financing conditions matter for the aggregate business cycle: increasing financing gaps and lower expected availability of finance foreshadow lower GDP growth.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 12 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- On 1 January 2023 Croatia adopted the euro and became the 20th member of the euro area. The Croatian economy is expected to benefit from the elimination of currency risk, as well as lower transaction and borrowing costs. After its accession to the EU in 2013, Croatia made significant progress in addressing macroeconomic imbalances and achieving convergence towards the euro area. It now needs to continue with those reform efforts in order to fully reap the benefits of the euro and to allow adjustment mechanisms to operate efficiently within the enlarged currency area.
- JEL Code
- E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
F15 : International Economics→Trade→Economic Integration
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
- 12 January 2023
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 8, 2022Details
- Abstract
- This article provides an initial review of the ECB’s pandemic emergency purchase programme (PEPP), with a focus on its objectives, implementation, and effectiveness. The ECB launched the PEPP in March 2020 in response to the extraordinary economic and financial shock brought about by the coronavirus (COVID-19) pandemic. Implementation of the programme was flexible, spreading purchases over time, across asset classes and among jurisdictions. The PEPP was instrumental in supporting market functioning and the transmission of the monetary policy stance, and thus in countering pandemic-related risks to price stability.
- 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
E65 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Studies of Particular Policy Episodes
- 11 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- This box examines the impact of the recent increase in energy prices on real consumer spending in the euro area. The empirical framework relies on a structural vector autoregression (SVAR) model and identifies adverse energy supply shocks that lead to a deterioration in the terms of trade, as captured by the ratio between the GDP deflator and the private consumption deflator, and a decline in real consumer spending. It finds that energy supply shocks have significantly weighed on total private consumption in recent quarters, with durable goods consumption being particularly affected.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
- 10 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- This box discusses fiscal policy orientation in 2023 in the context of the ongoing European Semester.
- JEL Code
- E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
H6 : Public Economics→National Budget, Deficit, and Debt
- 10 January 2023
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 8, 2022Details
- Abstract
- Headline inflation has increased sharply in the euro area and in the United States since the start of 2021. But there are major differences between inflation developments in these two economies. In particular, energy inflation has been much higher in the euro area – leading to higher headline inflation than in the United States in recent months. As the euro area is significantly more dependent on energy imports than the United States, the rise in energy prices constitutes a strong adverse terms-of-trade shock to euro area income. Amid the resulting relatively slower recovery from the pandemic in the euro area, the contribution of demand to core inflation has increased more gradually and later in the euro area than in the United States. In addition, the short-term outlook for economic growth is weaker in the euro area than in the United States and the US labour market is tighter, implying a relatively smaller impetus from economic activity and the labour market to inflation in the euro area. Looking ahead, professional forecasters expect inflation to be somewhat more persistent in the United States than in the euro area.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
F4 : International Economics→Macroeconomic Aspects of International Trade and Finance
N10 : Economic History→Macroeconomics and Monetary Economics, Industrial Structure, Growth, Fluctuations→General, International, or Comparative
J3 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs
Interest rates
| Marginal lending facility | 2.75 % |
| Main refinancing operations (fixed rate) | 2.50 % |
| Deposit facility | 2.00 % |
Inflation rate
Inflation dashboardExchange rates
| USD | US dollar | 1.0865 | |
| JPY | Japanese yen | 141.10 | |
| GBP | Pound sterling | 0.87885 | |
| CHF | Swiss franc | 1.0017 |
Financial stability
Our tasks Institutional framework Financial Stability Review Macroprudential policy measuresMarket operations
Open market operations Asset purchase programmes Lendings of holdings under PSPPNOT AN EXPERT? CHECK OUT OUR EXPLAINERS
LEARN MORE
What is the European Central Bank?