ACCOUNTABILITY
20 March 2023
Hearing at the European Parliament
President Christine Lagarde spoke before the Committee on Economic and Monetary Affairs and answered questions from its members.
Introductory statement
PRESS RELEASE
19 March 2023
Central banks to enhance provision of US dollar liquidity
The ECB and other major central banks have agreed to increase the frequency of 7-day US dollar operations from weekly to daily as of Monday, 20 March to support the smooth functioning of US dollar funding markets.
Press release
MONETARY POLICY
16 March 2023
Latest ECB press conference
President Christine Lagarde and Vice-President Luis de Guindos explained the Governing Council’s latest monetary policy decisions and answered questions from journalists at a press conference.
Find out more- 19 March 2023
- PRESS RELEASE
- 19 March 2023
- PRESS RELEASEEnglishOTHER LANGUAGES (15) +
- 16 March 2023
- MONETARY POLICY DECISIONEnglishOTHER LANGUAGES (23) +Related
- 16 March 2023
- COMBINED MONETARY POLICY DECISIONS AND STATEMENT
- 16 March 2023
- EURO AREA PENSION FUND STATISTICSAnnexes
- 14 March 2023
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 14 March 2023
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 20 March 2023
- Speech by Christine Lagarde, President of the ECB, at the Hearing of the Committee on Economic and Monetary Affairs of the European ParliamentAnnexes
- 20 March 2023
- 16 March 2023
- Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Frankfurt am Main, 16 March 2023EnglishOTHER LANGUAGES (23) +Related
- 16 March 2023
- 10 March 2023
- Presentation by Fabio Panetta, Member of the Executive Board of the ECB, at the European Banking Federation Executive Committee Meeting
- 8 March 2023
- Speech by Christine Lagarde, President of the ECB, at the International Women’s Day event organised by World Trade Organization (WTO) in Geneva
- 8 March 2023
- Introductory remarks by Fabio Panetta, Member of the Executive Board of the ECB, at the meeting of the Euro Cyber Resilience Board for pan-European Financial Infrastructures
- 5 March 2023
- Interview with Christine Lagarde, President of the ECB, conducted by Adolfo Lorente, from El Correo
- 1 March 2023
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Nicholas Owen
- 28 February 2023
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted on Friday, 24 February 2023 by Balázs Korányi and Frank Siebelt
- 27 February 2023
- Interview with Christine Lagarde, President of the ECB, conducted M.C. Govardhana Rangan on 24 February 2023
- 25 February 2023
- Interview with Christine Lagarde, President of the ECB, conducted by Petri Sajari
- 9 March 2023
- Europe must speed up its green and digital transition. For that, we need to complete the Capital Markets Union to provide effective financing. This is the plea made by the five Presidents of the ECB, EIB, European Council, European Commission and Eurogroup in a joint post.EnglishOTHER LANGUAGES (23) +
- 7 March 2023
- Croatian consumers have expressed concerns about price increases related to the euro changeover. Preliminary evidence presented in this ECB blog post shows that the changeover from kuna to euro has so far had relatively little impact on Croatian consumer prices and price perceptions.Details
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 1 March 2023
- Millions of Ukrainians were displaced by Russia’s unjustified war and have found refuge in the euro area. Many refugees want to work and thus increase the euro area labour force. This ECB Blog post updates previous calculations by considering novel information on the whereabouts and demographics of Ukrainian refugees.Details
- JEL Code
- J21 : Labor and Demographic Economics→Demand and Supply of Labor→Labor Force and Employment, Size, and Structure
J61 : Labor and Demographic Economics→Mobility, Unemployment, Vacancies, and Immigrant Workers→Geographic Labor Mobility, Immigrant Workers
J82 : Labor and Demographic Economics→Labor Standards: National and International→Labor Force Composition
Related - 24 February 2023
- Russia’s unjustified war against Ukraine and its people is first and foremost a human tragedy. It is also having an economic impact on Ukraine and beyond. This ECB Blog post – the first in a series about the economic effects of the war – focuses on inflation in the euro area.Details
- JEL Code
- E30 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→General
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
Related - 15 February 2023
- Do the NextGenerationEU funds hold up to their promise to make Europe’s economies stronger and more resilient? Two years into the lifetime of the programme, this ECB Blog post assesses where governments stand and what risks there are for implementation.Details
- JEL Code
- H54 : Public Economics→National Government Expenditures and Related Policies→Infrastructures, Other Public Investment and Capital Stock
- 20 March 2023
- SURVEY OF MONETARY ANALYSTS AGGREGATE RESULTS
- 17 March 2023
- MEP LETTER
- 17 March 2023
- MEP LETTER
- 17 March 2023
- WORKING PAPER SERIES - No. 2795Details
- Abstract
- This paper evaluates the resilience benefits of borrower-based macroprudential policies—such as LTV, DSTI, or DTI caps—for households and banks in the EU. To that end, we employ a further developed variant of the integrated micro-macro simulation model of Gross and Población (2017). Besides various methodological advances, joint policy caps are now also considered, and the resilience benefits are decomposed across income and wealth categories of borrowing households. Our findings suggest that (1) the resilience of households improves notably as a result of implementing individual and joint policy limits, with joint limits being more than additively effective; (2) borrower-based measures can visibly enhance the quality of bank mortgage portfolios over time, supporting bank solvency ratios; and (3) the policies’ resilience benefits are more pronounced for households located at the lower end of the income and wealth distributions.
- JEL Code
- C33 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Panel Data Models, Spatio-temporal Models
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G18 : Financial Economics→General Financial Markets→Government Policy and Regulation
- 16 March 2023
- MACROECONOMIC PROJECTIONS FOR THE EURO AREAAnnexes
- 16 March 2023
- ANNEX
- 15 March 2023
- OCCASIONAL PAPER SERIES - No. 310Details
- Abstract
- Macroprudential policies since the global financial crisis have been central to safeguarding financial stability. Despite the increasing use of multiple policy instruments, a detailed understanding of interactions among them is still needed to assess how instrument combinations can enhance the effectiveness of macroprudential action. This paper proposes a conceptual framework for informing the choice of combinations of macroprudential instruments, looking at the role of micro and macroeconomic transmission channels, interactions across policy objectives, the importance of country specificities and linkages with other macroeconomic or supervisory policies. It also reviews considerations related to circumvention, leakages, time of activation and communication of policies, all of which may affect the desirability of different combinations of macroprudential instruments. The paper also discusses a possible operational use of combinations of macroprudential instruments to address selected risks and provides a rich analysis of instrument interactions within the categories of borrower-based and, respectively, capital-based measures. The paper concludes that the combinations of capital and borrower-based instruments ensures a comprehensive coverage of different systemic risks and entail important synergies.
- JEL Code
- 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
- 13 March 2023
- OTHER PUBLICATION
- 8 March 2023
- WORKING PAPER SERIES - No. 2794Details
- Abstract
- Is digitalisation a massive gamechanger which will deliver huge gains in productivity, or is it more of a sideshow with only limited impacts? We use a large balance sheet panel dataset comprising more than 19 million European firm-level observations to empirically investigate the impact of digitalisation on productivity growth via various previously unexplored chan-nels and mechanisms. Our results suggest that for two otherwise identical firms, the firm that exhibits on average a higher share of investment in digital technologies will exhibit a faster rate of TFP growth, but not all firms and sectors experience significant productivity gains from digitalisation. Digitalisation does not seem to have relatively stronger impacts on the productivity of frontier firms compared to laggards, nor does it help to turn laggards into frontier firms. Overall, firms should not regard digital investment as a ‘one-size-fits-all’ strategy to improve their productivity. Digital technologies are a gamechanger for some firms. But they seem more like a sideshow for most firms, who attempt to be increasingly digital but are not able to adequately reap its productivity gains.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D24 : Microeconomics→Production and Organizations→Production, Cost, Capital, Capital, Total Factor, and Multifactor Productivity, Capacity
D25 : Microeconomics→Production and Organizations
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
- 7 March 2023
- WORKING PAPER SERIES - No. 2793Details
- Abstract
- Climate change and the public policies to arrest it are and will continue reshaping the global economy. This Discussion Paper draws on economic research to identify some key medium- and long-run economic implications of these developments. It explores implications for growth, innovation, inflation, financial markets, fiscal policy, and several socio-economic outcomes. The main message that emerges is that climate change will cause income divergence across individuals, sectors, and regions, adjustment in energy markets, increased inflation variability, financial markets stress, intensified innovation, increased migration, and rising public debt. These challenges appear manageable for EU member states, especially under an early and orderly transition scenario. At the same time, the direction, scope, and speed of economic transformation is subject to large uncertainty due to two separate factors: the wide range of climate scenarios for a given trajectory of greenhouse gas emissions and the exact policy path governments choose, especially in the context of the ongoing Russian aggression in Ukraine.
- JEL Code
- D6 : Microeconomics→Welfare Economics
E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
F2 : International Economics→International Factor Movements and International Business
G2 : Financial Economics→Financial Institutions and Services
O1 : Economic Development, Technological Change, and Growth→Economic Development
Q5 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics - Network
- Discussion papers
- 2 March 2023
- WORKING PAPER SERIES - No. 2792Details
- Abstract
- IFRS 9 substantially affects the financial sector by changing the impairment methodology for credit losses. This paper analyzes the implications of the change from IAS 39 to IFRS 9 in the context of bank resilience. We shed light on two effects. First, the “cliff-effect”, which refers to sudden increases in impairments. It occurred under IAS 39, as credit losses were only recognized with hindsight, and thus late and abruptly. IFRS 9 was designed to mitigate this issue through a staging approach, which gradually recognizes expected credit losses (ECL). These anticipated impairments, however, constitute a significant “front-loading”, which is the second effect we investigate. The earlier recognition of losses may adversely impact bank resilience through lower capital levels. In the absence of archival data of IFRS 9 and their potential biases due to the COVID-19 pandemic, we use the European bank stress test results as a natural experiment, in which all banks are subject to the same regulations and exogenous shocks. This characteristic allows us to isolate otherwise immeasurable effects and empirically investigate, whether the conjunction of both effects constitutes a net benefit to banks’ resilience. Furthermore, the vigorousness of procyclicality under IFRS 9 can be compared to IAS 39 by contrasting a hypothetical baseline and an adverse scenario.
- JEL Code
- E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
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
M41 : Business Administration and Business Economics, Marketing, Accounting→Accounting and Auditing→Accounting
M48 : Business Administration and Business Economics, Marketing, Accounting→Accounting and Auditing→Government Policy and Regulation
- 2 March 2023
- OTHER PUBLICATION
- 27 February 2023
- WORKING PAPER SERIES - No. 2791Details
- Abstract
- We propose to treat survey-based density expectations as compositional data when testing either for heterogeneity in density forecasts across different groups of agents or for changes over time. Monte Carlo simulations show that the proposed test has more power relative to both a bootstrap approach based on the KLIC and an approach which involves multiple testing for differences of individual parts of the density. In addition, the test is computaionally much faster than the KLIC-based one, which relies on simulations, and allows for comparisons across multiple groups. Using density expectations from the ECB Survey of Professional Forecasters and the U.S. Survey of Consumer Expectations, we show the usefulness of the test in detecting possible changes in density expectations over time and across different types of forecasters.
- JEL Code
- C12 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Hypothesis Testing: General
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
E27 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Forecasting and Simulation: Models and Applications
- 27 February 2023
- SURVEY OF MONETARY ANALYSTS
- 24 February 2023
- RESEARCH BULLETIN - No. 104Details
- Abstract
- In this article we exploit the richness and flexible design of the CES to explore in detail recent changes in consumers’ medium-term inflation expectations. The data suggest that over the course of 2022 these expectations became less well anchored around the ECB’s 2% inflation target. By taking the necessary actions and actively communicating how monetary policy is contributing to stabilising future inflation, the ECB can help strengthen public trust and prevent recent price and cost shocks from having longer-lasting inflationary effects.
- JEL Code
- C83 : Mathematical and Quantitative Methods→Data Collection and Data Estimation Methodology, Computer Programs→Survey Methods, Sampling Methods
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications
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
- 23 February 2023
- ANNUAL CONSOLIDATED BALANCE SHEET OF THE EUROSYSTEMEnglishOTHER LANGUAGES (23) +Related
- 23 February 2023
- PRESS RELEASEEnglishOTHER LANGUAGES (22) +
- 23 February 2023
- ANNUAL ACCOUNTSEnglishOTHER LANGUAGES (23) +Related
- 23 February 2023
- PRESS RELEASEEnglishOTHER LANGUAGES (22) +
- 23 February 2023
- WORKING PAPER SERIES - No. 2790Details
- Abstract
- This paper investigates to what extent the introduction of negative monetary policy rates altered competitive behaviour in the euro area banking sector. Specifically, it analyses the effect that negative policy rates had on euro area banks’ market power in comparison to banks that have not been subject to negative rates. The analysis, considering a sample of 4,223 banks over the period 2011–2018 and relying on a difference-in-differences methodology, finds that negative monetary policy rates led to an increase in euro area banks’ market power. Furthermore, it shows that, during the negative interest rate policy period, change in banks’ competitive behaviour affected the bank lending channel and discouraged banks from taking excessive risks.
- JEL Code
- 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
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G20 : Financial Economics→Financial Institutions and Services→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 23 February 2023
- WORKING PAPER SERIES - No. 2789Details
- Abstract
- The acceleration of house price growth amidst falling interest rates to record-low levels across euro area countries between 2015 and 2021 has sparked renewed interest in the link between the two variables. Asset-pricing theory suggests that real house prices respond to changes in real interest rates in a non-linear fashion. This non-linearity should be especially pronounced at very low real interest rates. Most existing empirical studies estimate models with a con-stant semi-elasticity, thereby ruling out by design the potential non-linearities between house prices and interest rates. To address this issue, we estimate a panel model for the euro area countries with a constant interest rate elasticity (as opposed to a constant semi-elasticity), which is consistent with asset pricing theory. Our empirical results suggest that, in a low interest rate environment such as the period between 2015 and 2021, non-linearities in the house price response to interest rate changes are important: an increase of real interest rates from ultra-low levels could lead to downward pressure on real house prices three to eight times higher than the literature suggests.
- JEL Code
- 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
R21 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Household Analysis→Housing Demand
R30 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Real Estate Markets, Spatial Production Analysis, and Firm Location→General
- 21 February 2023
- WORKING PAPER SERIES - No. 2788Details
- Abstract
- Empirical analyses starting from Laubach and Williams (2003) find that the natural rate of interest is not constant in the long-run. This paper studies the optimal response to stochastic changes of the long-run natural rate in a suitably modified version of the new Keynesian model. We show that, because of the zero lower bound (ZLB) on nominal interest rates, movements towards zero of the long-run natural rate cause an increasingly large downward bias in expectations. To offset this bias, the central bank should aim to keep the real interest rate systematically below the long-run natural rate, as long as policy is not constrained by the ZLB. The neutral rate – the level of the policy rate consistent with stable inflation and the natural rate at its long-run level – will be lower than the long-run natural rate. This is the case both under optimal policy, and under a price level targeting rule. In the latter case, the neutral rate is equal to zero as soon as the long-run natural rate falls below 1%.
- JEL Code
- C63 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Computational Techniques, Simulation Modeling
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 20 February 2023
- WORKING PAPER SERIES - No. 2787Details
- Abstract
- This paper evaluates the impact of the March 2020 European Central Bank recommenda-tion that banks do not pay dividends or buy back shares on their market values. It documents a causal negative impact on bank share prices of around 7% during the two weeks following its announcement. The recommendation affected the market values of banks directly, by delaying investor cash flows and indirectly, by increasing the uncertainty about future distri-butions and thus banks’ equity risk premia. The impact differed across banks depending on their distribution plans and risk-adjusted profitability. Our analysis highlights the impor-tance of managing perceptions about dividend uncertainty through credible communication about the expected duration, frequency and severity of dividend restrictions to limit their unintended side effects.
- JEL Code
- G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
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
G35 : Financial Economics→Corporate Finance and Governance→Payout Policy
Interest rates
| Marginal lending facility | 3.75 % |
| Main refinancing operations (fixed rate) | 3.50 % |
| Deposit facility | 3.00 % |
Inflation rate
Inflation dashboardExchange rates
| USD | US dollar | 1.0717 | |
| JPY | Japanese yen | 140.77 | |
| GBP | Pound sterling | 0.87560 | |
| CHF | Swiss franc | 0.9928 |
Financial stability
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