SPEECH
14 June 2021
From market neutrality to market efficiency
We at the ECB can act as a catalyst to accelerate the transition to a carbon-neutral economy in line with our mandate, says Executive Board member Isabel Schnabel. Shifting from market neutrality to market efficiency would be an important step in acknowledging climate externalities.
Speech
MONETARY POLICY
10 June 2021
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 on 10 June 2021.
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PUBLICATION
19 May 2021
Explore inflation in a new interactive way
Explore how euro area inflation differs between countries and products over time and find your personal inflation rate in our new interactive tool available in 23 EU languages.
Statistics Insights- 11 June 2021
- EURO AREA SECURITIES ISSUES STATISTICSAnnexes
- 11 June 2021
- EURO AREA SECURITIES ISSUES STATISTICS
- 11 June 2021
- EURO AREA SECURITIES ISSUES STATISTICS
- 10 June 2021
- MONETARY POLICY DECISIONEnglishOTHER LANGUAGES (22) +
- 8 June 2021
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 8 June 2021
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 7 June 2021
- MFI INTEREST RATE STATISTICS
- 2 June 2021
- PRESS RELEASE
- 14 June 2021
- Welcome address by Isabel Schnabel, Member of the Executive Board of the ECB, at the ECB DG-Research Symposium “Climate change, financial markets and green growth”
- 10 June 2021
- Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Frankfurt am Main, 10 June 2021EnglishOTHER LANGUAGES (22) +
- 3 June 2021
- Speech by Frank Elderson, Chair of the Central Banks and Supervisors Network for Greening the Financial System, Member of the Executive Board and Vice-Chair of the Supervisory Board of the ECB, at The Green Swan Conference – Coordinating finance on climate
- 2 June 2021
- Speech by Christine Lagarde, President of the ECB, on the occasion of the awarding of the Prix Turgot 2021, Paris
- 27 May 2021
- Keynote speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the “VIII. New Paradigm Workshop”, organised by the Forum New Economy
- 14 June 2021
- Interview with Christine Lagarde, President of the ECB, conducted by Johanna Treeck and Florian Eder on 11 June 2021 in Frankfurt
- 28 May 2021
- Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Balazs Koranyi, Frank Siebelt and Francesco Canepa
- 26 May 2021
- Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Jun Ishikawa
- 10 May 2021
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Eric Albert and Marie Charrel
- 8 May 2021
- Interview with Frank Elderson, Member of the Executive Board of the ECB, conducted by Annemiek Leclaire
- 11 May 2021
- Blog post by Fabio Panetta, Member of the Executive Board of the ECBDetails
- 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 ECBDetails
- 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.
- 25 March 2021
- Blog post by Fabio Panetta, Member of the Executive Board of the ECB, and Ulrich Bindseil, ECB Director General Market Infrastructure and PaymentsDetails
- Summary
- At the ECB we are committed to understanding people’s needs and ensuring the digital euro would be widely accepted, writes Executive Board member Fabio Panetta with Ulrich Bindseil in The ECB Blog.
- 22 March 2021
- Blog post by Christine Lagarde, President of the ECBDetails
- Summary
- Our pandemic emergency purchase programme (PEPP) has provided crucial support to euro area citizens since its launch a year ago, writes President Christine Lagarde in The ECB Blog. The PEPP has been, and remains, at the core of our pandemic policy response.
- 18 March 2021
- Blog post by Luis de Guindos, Vice-President of the ECBDetails
- Summary
- The damage caused by more frequent and severe natural disasters far exceeds the costs of transitioning to a greener economy, writes Vice-President Luis de Guindos in his ECB Blog post on our first climate stress test for banks and companies.
- 14 June 2021
- WORKING PAPER SERIES - No. 2566Details
- Abstract
- We use microdata to estimate the strength of price selection { a key metric for the effect of monetary policy on the real economy. We propose a product-level proxy for mispricing and assess whether products with larger mispricing respond with a higher probability to identified monetary and credit shocks. We find that they do not, suggesting selection is absent. Instead, we detect state-dependent adjustment on the gross extensive margin. Our results are broadly consistent with second-generation state-dependent pricing models and sizable effects of monetary policy on the real economy.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 10 June 2021
- MACROECONOMIC PROJECTIONS FOR THE EURO AREAAnnexes
- 10 June 2021
- ANNEX
- 4 June 2021
- OTHER PUBLICATION
- 2 June 2021
- THE INTERNATIONAL ROLE OF THE EUROAnnexes
- 2 June 2021
- THE INTERNATIONAL ROLE OF THE EURO
- 2 June 2021
- WORKING PAPER SERIES - No. 2565Details
- Abstract
- Macro-prudential authorities need to assess medium-term downside risks to the real economy, caused by severe financial shocks. Before activating policy measures, they also need to consider their short-term negative impact. This gives rise to a risk management problem, an inter-temporal trade-off between expected growth and downside risk. Predictive distributions are estimated with structural quantile vector autoregressive models that relate economic growth to measures of financial stress and the financial cycle. An empirical study with euro area and U.S. data shows how to construct indicators of macro-prudential policy stance and to assess when interventions may be beneficial.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
C33 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Panel Data Models, Spatio-temporal Models
- 1 June 2021
- WORKING PAPER SERIES - No. 2564Details
- Abstract
- This paper provides new empirical evidence that bears on the efficacy of unconventional monetary policies when the main policy rate is negative. When a negative interest rate policy (NIRP) is deployed in concert with rate forward guidance (FG) and quantitative easing (QE), the identification of the impacts of these unconventional instruments of monetary policy is challenging. We propose a novel identification approach that seeks to overcome this challenge by combining a dense, controlled event study with forward curve counterfactuals that we construct using predictive rate densities derived from rate options. We find that NIRP has exerted a sizeable influence on the term structure of interest rates throughout maturities while, on net, the impact of rate FG has been more muted. QE explains the lion’s share of yield effects, particularly over the back end of the yield curve. We then feed these rate counterfactuals into a large-scale Bayesian VAR and generate alternative histories for the euro area macro-economy that one would likely have observed between 2013 and 2020 in no-NIRP (with or without FG) and in no-QE regimes. According to this conditional forecasting exercise, in 2019 GDP growth and annual inflation would have been 1.1 p.p. and 0.75 p.p. lower, respectively, and the unemployment rate 1.1 p.p. higher than they actually were, had the ECB abstained from using NIRP, FG and QE over the previous six years or so.
- 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
C54 : Mathematical and Quantitative Methods→Econometric Modeling→Quantitative Policy Modeling
C58 : Mathematical and Quantitative Methods→Econometric Modeling→Financial Econometrics
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 1 June 2021
- WORKING PAPER SERIES - No. 2563Details
- Abstract
- By focusing on the cost conditions at issuance, I find that not only the Covid-19 pandemic effects were different across bonds and firms at different stages, but also that the market composition was significantly affected, collapsing on investment-grade bonds, a segment in which the share of bonds eligible to the ECB corporate programmes strikingly increased from 15% to 40%. Contemporaneously, the high-yield segment shrunk to almost disappear at 4%. Another source of risk detected in the pricing mechanism is the weak resilience to pandemic: the premium requested is around 30 bp and started to be priced only after the early containment actions taken by the national authorities. On the contrary, I do not find evidence supporting an increased risk for corporations headquartered in countries with a reduced fiscal space, nor the existence of a premium in favour of green bonds, which should be the backbone of a possible “green recovery”.
- JEL Code
- G15 : Financial Economics→General Financial Markets→International Financial Markets
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
- 1 June 2021
- SURVEY ON THE ACCESS TO FINANCE OF ENTERPRISES IN THE EURO AREAAnnexes
- 1 June 2021
- SAFE QUESTIONNAIRE
Related - 31 May 2021
- WORKING PAPER SERIES - No. 2562Details
- Abstract
- Inflation targeting is implemented in different ways – most often by adopting point targets, by having tolerance bands around a point target, or by specifying target ranges. Using data for 20 economies, this paper tests whether the various target types affect the anchoring of inflation expectations at shorter horizons differently. It tests two contradictory hypotheses, namely that targets with intervals lead to (i) less anchoring, e.g. because they provide more flexibility to the central bank, or (ii) better anchoring, because they are missed less often, leading to an enhanced credibility. The evidence refutes the first hypothesis, and generally finds that target ranges or (in some cases) tolerance bands outperform the other types. However, the effects partially depend on the economic context and no target type consistently outperforms all others. This suggests that there are some benefits to adopting intervals, but the central bank can anchor inflation expectations also by other means.
- 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
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 31 May 2021
- WORKING PAPER SERIES - No. 2561Details
- Abstract
- We decompose euro area sovereign bond yields into five distinct components: i) expected future short-term risk-free rates and a term premium, ii) default risk premium, iii) redenomination risk premium, iv) liquidity risk premium, and a v) segmentation (convenience) premium. Identification is achieved by considering sovereign bond yields jointly with other rates, including sovereign credit default swap spreads with and without redenomination as a credit event feature. We apply our framework to study the impact of European Central Bank (ECB) monetary policy and European Union (E.U.) fiscal policy announcements during the Covid-19 pandemic recession. We find that both monetary and fiscal policy announcements had a pronounced effect on yields, mostly through default, redenomination, and segmentation premia. While the ECB's unconventional monetary policy announcements benefited some (vulnerable) countries more than others, owing to unprecedented flexibility in implementing bond purchases, the E.U.’s fiscal policy announcements lowered yields more uniformly.
- JEL Code
- C22 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models &bull Diffusion Processes
G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
Interest rates
| Marginal lending facility | 0.25 % |
| Main refinancing operations (fixed rate) | 0.00 % |
| Deposit facility | − 0.50 % |
Inflation rate
Inflation dashboardReference rates
| USD | US dollar | 1.2112 | |
| JPY | Japanese yen | 132.95 | |
| GBP | Pound sterling | 0.85898 | |
| CHF | Swiss franc | 1.0889 |
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 EXPLAINER
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