29 July 2015ECONOMIC BULLETIN

Little convergence in the euro area

While central and eastern European economies have been moving towards the EU average since 1999, the initial euro area countries have made little progress towards convergence over that period, due to weak institutions, structural rigidities, low productivity and other factors.

Real convergence in the euro area: evidence, theory and policy implications
Economic Bulletin issue 5/2015
28 July 2015ECONOMIC BULLETIN

Impact of low interest rates on money market funds

Issuance of euro area money market fund shares has picked up since mid-2014, reflecting increased returns relative to similar investment opportunities. Yet the low or negative short-term interest rates pose challenges, according to the upcoming Economic Bulletin.

The impact of negative short-term rates on the money market fund industry
Economic Bulletin issue 5/2015
29/07/2015
Statistical press release: Euro area economic and financial developments by institutional sector: 1st quarter 2015
27/07/2015
Statement by the European Commission, the ECB and the IMF on Cyprus
27/07/2015
Statistical press release: Monetary developments in the euro area
23/07/2015
ECB and partners sign memorandum of understanding on new €20 banknote
22/07/2015
New breakdowns of monetary and financial statistics
21/07/2015
Statistical press release: Euro area investment fund statistics
20/07/2015
Statistical press release: Euro area monthly balance of payments (May 2015)
17/07/2015
Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest rates)
July 2015
17/07/2015
Results of the Q3 2015 ECB Survey of Professional Forecasters (SPF)
13/07/2015
Statistical press release: Euro area households and non-financial corporations (Early release)

All press releases

16/07/2015
Mario Draghi:  Introductory statement to the press conference (with Q&A)
Mario Draghi, President of the ECB, 
Vítor Constâncio, Vice-President of the ECB, 
Frankfurt am Main, 16 July 2015
14/07/2015
Yves Mersch:  Ways towards more dynamic growth
Speech by Yves Mersch, Member of the Executive Board of the ECB, 
at the DZ BANK Kapitalmarktkonferenz 2015, Frankfurt, 14 July 2015
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03/07/2015
Vítor Constâncio:  Strengthening macroprudential policy in Europe
Speech by Vítor Constâncio, Vice-President of the ECB, 
at the Conference on “The macroprudential toolkit in Europe and credit flow restrictions”, organised by Lietuvos Bankas, 
Vilnius, 3 July 2015

Summary

Strengthening macroprudential policy in Europe

Speech by Vítor Constâncio, Vice-President of the ECB,
at the Conference on “The macroprudential toolkit in Europe and credit flow restrictions”, organised by Lietuvos Bankas,
Vilnius, 3 July 2015

The current euro area environment, with policy rates required to stay low for a prolonged period of time and an apparent disconnect between the business and financial cycle, clearly points to a situation where monetary policy cannot deviate from price stability objectives to influence the financial cycle. This is the task of macroprudential policy. While acknowledged in principle, this fact has not yet been fully reflected in our policy frameworks.

Two major moves are required. First, macroprudential policy must place greater emphasis on preventing large fluctuations in the financial cycle, rather than simply increasing resilience to shocks when they occur. In addition to the bank-side capital based measures enhancing banks’ resilience, borrower-based instruments (such as LTVs or DSTIs), which have proved to be more effective in curtailing excessive credit growth, and are also applicable in a time-varying fashion, should gain more prominence. In particular, borrower-based measures should be properly embedded in European legislation, which is not the case at present. Second, a broader macroprudential toolkit is needed to address risks stemming from the shadow banking sector due to its increasing role in credit intermediation. This could involve measures such as redemption gates and loading fees to provide additional safeguards. Guided stress tests can provide comparable assessments of the health of individual institutions and of the resilience of the financial system as a whole. Appropriate policy responses to mitigate growing risks need however to be calibrated, in order to ensure a contained impact on credit supply to the real economy.

02/07/2015
Mario Draghi:  Opening remarks at the T2S launch celebration
Mario Draghi, President of the ECB, 
Milan, 2 July 2015
02/07/2015
Yves Mersch:  Translating a shared vision into a winning story
Closing Remarks at the T2S launch celebration by Yves Mersch, Member of the Executive Board of the ECB, 
Milan, 2 July 2015

All speeches

27/07/2015
Benoît Cœuré:  Interview with Le Monde
Interview of Benoît Cœuré, Member of the Executive Board of the ECB, 
conducted by Marie Charrel of Le Monde and published on 27 July 2015
29/06/2015
Benoît Cœuré:  Interview with Les Echos
Interview with Benoît Cœuré, Member of the Executive Board of the ECB, 
conducted by Nicolas Barré, Catherine Chatignoux, Jean-Philippe Lacour, Etienne Lefebvre, Guillaume Maujean, Dominique Seux and François Vidal, Les Echos, on 29 June 2015.
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13/06/2015
Peter Praet:  Interview with der Standard
Interview with Peter Praet, Member of the Executive Board of the ECB, and der Standard, conducted by Andras Szigètvari on 10 June 2015
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10/06/2015
Benoît Cœuré:  Interview with La Croix
Interview with Benoît Cœuré, Member of the Executive Board of the ECB, 
conducted by Marie Dancer, La Croix, 10 June 2015
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19/05/2015
Benoît Cœuré:  Interview with L’Economie politique
Interview with Benoît Cœuré, Member of the Executive Board of the ECB, 
conducted by Sandra Moatti in April 2015 and published in the issue # 66 of L’Economie politique (quarterly publication of Alternatives Economiques)
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All interviews

30/07/2015
Recent developments in extra-euro area trade: the role of emerging market economies (Economic Bulletin 5/2015)
30/07/2015
Does consumer confidence predict private consumption? (Economic Bulletin 5/2015)
30/07/2015
Why has growth in emerging market economies slowed? (Economic Bulletin 5/2015)
30/07/2015
Economic Bulletin 5/2015
29/07/2015
Follow-up letter from the ECB President to Ms Marian Harkin, MEP, on the ECB’s participation in the Irish parliamentary Committee of Inquiry

All publications

21/07/2015
Guideline (EU) 2015/1197 of the ECB of 2 July 2015 amending Guideline ECB/2010/20 on the legal framework for accounting and financial reporting in the European System of Central Banks  (ECB/2015/24)
21/07/2015
Decision (EU) 2015/1196 of the ECB of 2 July 2015 amending Decision ECB/2010/21 on the annual accounts of the ECB  (ECB/2015/26)
20/07/2015
Opinion on recovery and resolution of credit institutions and investment firms (CON/2015/25)
Greece, 
ENGLISH
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15/07/2015
Opinion on amendments to the law on the Hellenic Statistical System and the Hellenic Statistical Authority (CON/2015/24)
Greece, 
ENGLISH
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07/07/2015
Opinion on a new legal framework for savings banks (CON/2015/23)
Portugal, 
ENGLISH
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All legal acts

27 July 2015ECONOMIC BULLETIN

Has underlying inflation reached a turning point?

Several measures of underlying inflation have risen recently due to both persistent and temporary factors. Despite these increases, more data are needed to provide evidence of a turnaround.
The full Economic Bulletin issue 05/2015 will be published on Thursday 30 July 2015 at 10:00 CET.

Has underlying inflation reached a turning point?
Economic Bulletin issue 5/2015
EXPLAINERS

What is a central bank?

Is a central bank just another bank? What is the role of central banks in the economy and what is special about them?

Interest rates

Marginal lending facility 0.30 %
Main refinancing operations (fixed rate) 0.05 %
Deposit facility − 0.20 %
Effective from 10 September 2014

Inflation rates

Full inflation chart Inflation dashboard

Reference rates

USD US dollar icon arrow up 1.1030
JPY Japanese yen icon arrow up 136.50
GBP Pound sterling icon arrow up 0.70530
CHF Swiss franc icon arrow up 1.0622
Last update: Wednesday, 29 July 2015 Euro foreign exchange rates

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