ACCOUNT
14 May 2021
Account of April monetary policy meeting
The Governing Council agreed that financing conditions and the inflation outlook had remained broadly stable, validating the latest decision on the purchase pace. The commitment to preserving favourable financing conditions helped to reduce uncertainty and bolster confidence during the pandemic.
Account of April meeting
PUBLICATION
12 May 2021
Takeaways from the latest ECB Forum
The 2020 ECB Forum on Central Banking addressed key issues from the ongoing monetary policy strategy review, major structural changes in advanced economies and the post-pandemic recovery. Selected takeaways and the conference proceedings are now available.
Selected takeaways
YOUTH INITIATIVES
29 April 2021
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More on the quiz- 14 May 2021
- OTHER GOVERNING COUNCIL DECISIONEnglishOTHER LANGUAGES (22) +
- 14 May 2021
- MONETARY POLICY ACCOUNT
- 12 May 2021
- EURO AREA SECURITIES ISSUES STATISTICSAnnexes
- 12 May 2021
- EURO AREA SECURITIES ISSUES STATISTICS
- 12 May 2021
- EURO AREA SECURITIES ISSUES STATISTICS
- 11 May 2021
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 11 May 2021
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 11 May 2021
- PRESS RELEASE
- 6 May 2021
- Speech by Christine Lagarde, President of the ECB, at the European Commission’s high-level conference on the proposal for a Corporate Sustainability Reporting Directive, 6 May 2021
- 5 May 2021
- Speech by Philip R. Lane, Member of the Executive Board of the ECB, at the OMFIF virtual panel
- 29 April 2021
- Keynote speech by Frank Elderson, Vice-Chair of the Supervisory Board and Member of the Executive Board of the ECB, at the conference on “The Role of Banks in Greening Our Economies” organised by the European Bank for Reconstruction and Development and Hrvatska narodna banka
- 26 April 2021
- Philip R. Lane: Maximising the user value of statistics: lessons from globalisation and the pandemicSpeech by Philip R. Lane, Member of the Executive Board of the ECB, at the European Statistical Forum (virtual)
- 26 April 2021
- Welcome address by Fabio Panetta, Member of the Executive Board of the ECB, at the joint BIS, BoE, ECB and IMF conference on “Spillovers in a “post-pandemic, low-for-long” world”
- 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
- 3 May 2021
- Interview with Luis de Guindos, conducted by Tonia Mastrobuoni on 27 April 2021
- 29 April 2021
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Gabriel Mellqvist on 29 April 2021
- 28 April 2021
- Interview on Twitter with Isabel Schnabel, Member of the Executive Board of the ECB, conducted and published on 28 April 2021
- 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 May 2021
- WORKING PAPER SERIES - No. 2551Details
- Abstract
- Using a difference-in-differences approach and relying on confidential supervisory data and an unique proprietary data set available at the European Central Bank related to the 2016 EU-wide stress test, this paper presents novel empirical evidence that supervisory scrutiny associated to stress testing has a disciplining effect on bank risk. We find that banks that participated in the 2016 EU-wide stress test subsequently reduced their credit risk relative to banks that were not part of this exercise. Relying on new metrics for supervisory scrutiny that measure the quantity, potential impact, and duration of interactions between banks and supervisors during the stress test, we find that the disciplining effect is stronger for banks subject to more intrusive supervisory scrutiny during the exercise.
- JEL Code
- G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
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
- 14 May 2021
- WORKING PAPER SERIES - No. 2550Details
- Abstract
- Do climate-oriented regulatory policies affect the flow of credit towards polluting corporations? We match loan-level data to firm-level greenhouse gas emissions to assess the impact of the Paris Agreement. We find that, following this agreement, European banks reallocated credit away from polluting firms. In the aftermath of President Trump’s 2017 announcement that the United States was withdrawing from the Paris Agreement, lending by European banks to polluting firms in the United States decreased even further in relative terms. It follows that green regulatory initiatives in banking can have a significant impact combating climate change.
- JEL Code
- E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
H23 : Public Economics→Taxation, Subsidies, and Revenue→Externalities, Redistributive Effects, Environmental Taxes and Subsidies
- 12 May 2021
- WORKING PAPER SERIES - No. 2549Details
- Abstract
- In this paper, we survey the nascent literature on the transmission of negative policy rates. We discuss the theory of how the transmission depends on bank balance sheets, and how this changes once policy rates become negative. We review the growing evidence that negative policy rates are special because the pass-through to banks’ retail deposit rates is hindered by a zero lower bound. We summarize existing work on the impact of negative rates on banks’ lending and securities portfolios, and the consequences for the real economy. Finally, we discuss the role of different “initial” conditions when the policy rate becomes negative, and potential interactions between negative policy rates and other unconventional monetary policies.
- 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
- 12 May 2021
- WORKING PAPER SERIES - No. 2548Details
- Abstract
- We investigate asset returns around banking crises in 44 advanced and emerging economies from 1960 to 2018. In contrast to the view that buying assets during banking crises is a profitable long-run strategy, we find returns of equity and other asset classes generally underperform after banking crises. While prices are depressed during crises and partially recover after acute stress ends, consistent with theories of fire sales and intermediary-based asset pricing, we argue that investors do not fully anticipate the consequences of debt overhang, which result in lower long-run dividends. Our results on bank stock underperformance suggest that government-funded bank recapitalizations can often lead to substantial taxpayer losses.
- JEL Code
- G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
G14 : Financial Economics→General Financial Markets→Information and Market Efficiency, Event Studies, Insider Trading
G15 : Financial Economics→General Financial Markets→International Financial Markets
G41 : Financial Economics
- 12 May 2021
- FORUM ON CENTRAL BANKINGECB Forum on Central Banking 2020
- 12 May 2021
- FORUM ON CENTRAL BANKINGECB Forum on Central Banking 2020
- 11 May 2021
- OTHER PUBLICATION
- 10 May 2021
- WORKING PAPER SERIES - No. 2547Details
- Abstract
- This paper examines whether central bank communication stabilises euro area inflation expectations through the information and news channel. A novelty of the study is its use of data from Google Analytics on ECB website traffic as proxy for visitors’ attention to its communication. We conduct several econometric tests with daily data to measure the impact of ECB communication on the information demand of the public and ultimately on inflation expectations. Overall, this study shows that website attention, as captured by search volumes of visitors, influences euro area inflation expectations. We find that increased website attention contributes to narrowing the gap between market-based forecasts and (the mean of) longer-term professional inflation expectations. Our findings add to the theoretical evidence on the existence of an information and news channel.
- JEL Code
- C20 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→General
D80 : Microeconomics→Information, Knowledge, and Uncertainty→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
G14 : Financial Economics→General Financial Markets→Information and Market Efficiency, Event Studies, Insider Trading
- 7 May 2021
- WORKING PAPER SERIES - No. 2546Details
- Abstract
- We revisit the effects of globalisation over the past 50 years in a large sample of advanced and emerging countries. We use accessions to \Globalisation Clubs" (WTO, OECD, EU), financial liberalisation and an instrument for trade openness to study the trade-off between efficiency (proxied by real GDP per capita and TFP) and equity (proxied by the labour share of income and the Gini index of inequality). We find that (i) most of our episodes lead to an increase in trade openness (ii) effects on GDP per capita are mostly positive with some interesting exceptions and (iii) there is little evidence that globalisation shocks lead to more inequality.
- JEL Code
- F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
- 7 May 2021
- WORKING PAPER SERIES - No. 2545Details
- Abstract
- We build a three-period model to investigate market failures in the market-based financial system. Institutional investors (IIs), such as insurance companies and pension funds, have liabilities offering guaranteed returns and operate under a risk-sensitive solvency constraint. They seek to allocate funds to asset managers (AMs) that provide diversification when investing in risky assets. At the interim date, AMs that run investment funds face investor redemptions and liquidate risky assets and/or deplete cash holdings, if available. Dealer banks can purchase risky assets, thus providing market liquidity. The latter ultimately determines equilibrium allocations. In the competitive equilibrium, AMs suffer from a pecuniary externality and hold inefficiently low amounts of cash. Asset fire sales increase the overall cost of meeting redemptions and depress risk-adjusted returns delivered by AMs to IIs, forcing the latter to de-risk. We show that a macroprudential approach to (i) the liquidity regulation of AMs and (ii) the solvency regulation of IIs can improve upon the competitive equilibrium allocations.
- JEL Code
- D62 : Microeconomics→Welfare Economics→Externalities
G01 : Financial Economics→General→Financial Crises
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G38 : Financial Economics→Corporate Finance and Governance→Government Policy and Regulation
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 | 1.2123 | |
| JPY | Japanese yen | 132.49 | |
| GBP | Pound sterling | 0.86083 | |
| CHF | Swiss franc | 1.0952 |
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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