Digital euro
The Eurosystem is preparing for the potential issuance of a digital euro to complement physical cash.
EVENT
19 August 2026
Europa Open Air is back!
We’re delighted to announce that this year’s Europa Open Air concert will take place tomorrow, 20 August, at Weseler Werft, Frankfurt. Join us from 16:00 CET for an evening of free live music featuring our co-host Frankfurt Radio Symphony, or follow the performances online.
Find out more (in German)
FINANCIAL LITERACY
Closing the gender gap in financial literacy
Understanding key financial concepts can help people make informed choices about saving, spending and planning ahead. Yet only one in five Europeans have a high level of financial literacy, with women particularly affected. Explore why closing the gender gap matters.
Learn more
FRAUD
Protect yourself from fraud
Scammers often attempt to trick people by misusing the ECB’s name and logo or impersonating its staff members. The ECB will never ask you for investments, money or personal information. Learn how to spot and avoid fraud, including fake emails, phone calls and social media profiles, and AI-generated scams.
Follow our fraud protection tips- 19 August 2026
- BALANCE OF PAYMENTS (MONTHLY)
- 18 August 2026
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 18 August 2026
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 13 August 2026
- PRESS RELEASE
- 11 August 2026
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 11 August 2026
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 11 August 2026
- PRESS RELEASE
- 19 August 2026
- Panel remarks by Christine Lagarde, President of the ECB, at the International Business Council of the World Economic Forum
- 17 August 2026
- Slides by Philip R. Lane, Member of the Executive Board of the ECB, at Annual Congress of the European Economic Association in Dublin, Ireland
- 24 July 2026
- Slides by Philip R. Lane, Member of the Executive Board of the ECB, at MacGill Summer School 2026 in Glenties, Co. Donegal, Ireland
- 23 July 2026
- Christine Lagarde, President of the ECB, Boris Vujčić, Vice-President of the ECB, Frankfurt am Main, 23 July 2026EnglishOTHER LANGUAGES (23) +Related
- 17 July 2026
- Lecture by Piero Cipollone, Member of the Executive Board of the ECB, at the Annual Meeting of the Federation of Italian Cooperative Credit Banks (Federcasse)
- 15 July 2026
- Interview with Piero Cipollone, Member of the Executive Board of the ECB, conducted by Élisabeth Montaufray-Bureau on 10 July 2026
- 13 July 2026
- Interview with Piero Cipollone, Member of the Executive Board of the ECB, conducted by Ricardo Jesus Silva on 29 June 2026
- 2 July 2026
- Interview with Christine Lagarde, President of the ECB, conducted by Guillaume Benoit and Christophe Jakubyszyn on 24 June 2026
- 25 June 2026
- Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Mark Schieritz and Kolja Rudzio on 19 June 2026
- 10 June 2026
- Interview with Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Daan Ballegeer and Rutger Betlem on 19 May 2026
- 17 August 2026
- The rise of AI has driven a blistering rally in the tech sector, bringing stock market valuations to levels last seen during the dot-com bubble. Although AI is reshaping the economy, do today’s high valuations bear the risk of an abrupt and painful setback in the euro area?Details
- JEL Code
- G10 : Financial Economics→General Financial Markets→General
G15 : Financial Economics→General Financial Markets→International Financial Markets
O30 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→General
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
- 14 August 2026
- Widening global imbalances draw attention to policies shaping international trade. Using firm-level data, the ECB blog compares government support in China, the United States and the euro area. We find that subsidies drive Chinese exports in strategically important sectors.Details
- JEL Code
- F10 : International Economics→Trade→General
H20 : Public Economics→Taxation, Subsidies, and Revenue→General
F30 : International Economics→International Finance→General
- 7 August 2026
- Europe’s electricity mix has become cleaner and less exposed to fossil fuel price swings. The challenge now is to extend electrification to transport, heating and industry. The lesson from the 1970s is that we must not just diversify energy supply but push for structural change too.Details
- JEL Code
- N70 : Economic History→Transport, Trade, Energy, Technology, and Other Services→General, International, or Comparative
Q40 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→General
- 5 August 2026
- High energy prices have sparked new interest in energy-related renovations and non-fossil heating systems. This blog post argues that such investments cushion the impact of energy shocks on the building and construction sector.Details
- JEL Code
- Q41 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Demand and Supply, Prices
Q48 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Government Policy
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
- 31 July 2026
- Retail fuel prices have surged in 2026 following the outbreak of the conflict in the Middle East, driving up euro area energy inflation. In this blog, we examine the factors that drive fuel price dynamics at the pump.Details
- JEL Code
- Q40 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→General
Q41 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Demand and Supply, Prices
Q48 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Government Policy
- 20 August 2026
- WORKING PAPER SERIES - No. 3275Details
- Abstract
- We estimate the cyclical response of labour force participation to growth shocks across EU regions. We use a shift-share instrumental variable approach and local projections on EU Labour Force Survey microdata covering 15 countries and 114 regions over 2000–2020. The aggregate labour force participation rate is remarkably resilient, a clear contrast to the highly cyclical participation rate documented for the U.S. However, this resilience masks pronounced demographic heterogeneity. Men’s participation declines significantly while women’s remains stable, reflecting sectoral segregation and the added worker effect. Young workers exhibit the most persistent responses, with effects lasting up to eight years, consistent with hysteresis through human capital erosion. Less-educated and non-native workers bear disproportionate employment costs. The findings imply that aggregate slack measures may miss important distributional dimensions relevant for monetary, fiscal, and structural policy.
- JEL Code
- J21 : Labor and Demographic Economics→Demand and Supply of Labor→Labor Force and Employment, Size, and Structure
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
R23 : Urban, Rural, Regional, Real Estate, and Transportation Economics→Household Analysis→Regional Migration, Regional Labor Markets, Population, Neighborhood Characteristics
- 20 August 2026
- WORKING PAPER SERIES - No. 3274Details
- Abstract
- This paper investigates the interest rate pass-through of monetary policy in the euro area by focusing on the role of banks’ funding structures. We estimate the interest rate pass-through for loans to non-financial corporations using bank-level balance sheet data. In doing so, we interact the response of lending rates with characteristics of the funding structure, and show that banks that rely more on bond issuance than on the money market tend to be less responsive to policy changes. Finally, we test the presence of the asset-liability-management channel, and find that banks combining longer-term liabilities (higher bond shares) with longer rate fixation periods for loans (higher share of loans with fixed rates) exhibit the most muted lending rate response to policy shocks.
- JEL Code
- C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
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
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages - Network
- Challenges for Monetary Policy Transmission in a Changing World Network (ChaMP)
- 20 August 2026
- STATISTICS PAPER SERIES - No. 54Details
- Abstract
- The ECB’s inflation target is formulated in terms of headline inflation. However, domestically determined inflation features prominently in the monetary policy transmission mechanism and in gauging underlying inflation, making it important to assess it regularly. The ECB monitors various proxies for domestically determined inflation, including: (i) “domestic inflation”, which aggregates inflation items with a low import share; and (ii) “Supercore” inflation, which aggregates inflation items found to be sensitive to the aggregate business cycle. This paper provides a detailed overview of the methodologies used to derive both these indicators and updates the relevant input data. It suggests refinements to the methodologies that would also make these measures more robust in future updates. In addition, it explains the changes in these indicators due to the introduction of a new classification of consumer goods and services (European Classification of Individual Consumption according to Purpose (ECOICOP) version 2) for the compilation of the Harmonised Index of Consumer Prices (HICP). First, on domestic inflation, the paper explains the new underlying data on the import share of inflation items made available since the publication of its methodology, and provides an update, combined with a few methodological changes (for example, moving to a constant composition of the included items). Second, with regard to Supercore inflation, the paper explains the challenges of identifying a cyclical inflation indicator for the euro area, especially in the light of the recent large shocks, and explores modelling approaches. It proposes some refinements to the previous methodology, while keeping a Phillips curve approach as a focal point in the analysis. For both indicators, the paper presents the updated indicators and some key properties.
- 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
- 12 August 2026
- OCCASIONAL PAPER SERIES - No. 398Details
- Abstract
- The Eurosystem implements its monetary policy through a set of monetary policy instruments (MPIs). This report reviews the main changes in the use of MPIs and the associated developments in the Eurosystem’s monetary policy implementation framework over 2024-25. Inflation returned to the ECB’s medium-term target of 2%, supported by the smooth transmission of monetary policy. After completing the hiking cycle of 2022 and 2023, the ECB began reducing its key interest rates in June 2024. This easing phase occurred alongside further balance sheet normalisation. Holdings in the monetary policy bond portfolios continued to run-off, and funds lent under the third series of targeted longer-term refinancing operations (TLTRO III) were fully repaid by December 2024. In March 2024, the ECB announced several changes to its operational framework for implementing monetary policy following a review process. Finally, the collateral framework remained broad, while temporary crisis-related measures were phased out and climate-related considerations were further integrated.
- JEL Code
- D02 : Microeconomics→General→Institutions: Design, Formation, and Operations
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
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
G01 : Financial Economics→General→Financial Crises
- 11 August 2026
- WORKING PAPER SERIES - No. 3273Details
- Abstract
- This paper examines the impact of labour and product market reforms on private investment across 26 advanced economies from 1975 to 2020. To this end, we combine a narrative database on major structural reforms with local projections and augmented inverse probability weighting. We find that a major labour market reform typically increases the level of real private investment by 5% cumulatively within six years, while a major product market reform yields an impact of 3%. Structural reforms are particularly effective in stimulating private investment when the private sector has access to ample external finance and the rule of law is strong. Overall, our findings point to an important role for structural reforms in boosting private investment and thus long-term growth prospects in advanced economies.
- JEL Code
- E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
O43 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Institutions and Growth
L51 : Industrial Organization→Regulation and Industrial Policy→Economics of Regulation
- 10 August 2026
- WORKING PAPER SERIES - No. 3272Details
- Abstract
- This paper examines how monetary policy announcements affect firms’ employment expectations. Using German survey data, we combine high-frequency monetary policy surprises with survey response dates to identify the immediate and dynamic effects of monetary policy on firm-level expectations and subsequent employment. Contractionary shocks lead firms to revise employment plans downward immediately and persistently, eventually reducing employment growth. Initially, hiring plans are reduced, while layoffs increase later. Production expectations adjust twice as often but revert faster, consistent with greater labour market rigidity. Labour market institutions shape these responses: firms subject to the minimum wage or with lower collective bargaining coverage revise employment expectations more strongly. Financially constrained firms exhibit disproportionately larger downward revisions, indicating that the financial accelerator operates already at the expectation formation stage. Because firms adjust plans well before effects appear in aggregate data, employment expectations provide an early measure of monetary policy transmission to the labour market.
- 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
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
J20 : Labor and Demographic Economics→Demand and Supply of Labor→General
J63 : Labor and Demographic Economics→Mobility, Unemployment, Vacancies, and Immigrant Workers→Turnover, Vacancies, Layoffs
- 10 August 2026
- OCCASIONAL PAPER SERIES - No. 397Details
- Abstract
- This paper analyses the European prohibition of monetary financing from an economic perspective. The prohibition seeks to safeguard central bank independence in setting monetary policy to maintain price stability, and to preserve fiscal discipline, thereby preventing monetary policy from becoming constrained or hindered by fiscal policies. Imposing a prohibition on financing public deficits helps to ensure a clear separation of responsibilities between monetary policy and fiscal policy and is consistent with a range of macroeconomic theories, including monetarism and the fiscal theory of the price level. The current EU-wide ban is more stringent than those in place in Europe before the start of Economic and Monetary Union and also than those prevailing in other major currency areas of the world. Tasked with monitoring compliance with the prohibition among European national central banks, the European Central Bank (ECB) has developed certain standards over time, informed by definitions contained in EU regulations and by cases that have arisen over the years. Over the three decades since its introduction, the prohibition in general has been well respected, although a few actual or potential conflicts with the prohibition have required national central banks to take corrective action. Recent economic crises in Europe have given rise to academic proposals to reinterpret or circumvent the ban, notably during the COVID-19 pandemic. These suggestions have included central banks handing out “helicopter money” to the public and cancelling part of the government debt held by European central banks. In general, these proposals would seem to jeopardise the prohibition of monetary financing and ultimately weaken price stability and sound public finances.
- JEL Code
- E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
F45 : International Economics→Macroeconomic Aspects of International Trade and Finance
K33 : Law and Economics→Other Substantive Areas of Law→International Law
- 7 August 2026
- LETTERS TO MEPS
- 6 August 2026
- WORKING PAPER SERIES - No. 3271Details
- Abstract
- We show that monetary policy transmission is shaped not only by a sector’s own financial frictions but also by those prevailing in the broader production network. The latter, indirect frictions amplify the output and price effects of monetary policy and empirically dominate the direct ones. The amplification results from a downstream demand channel, as customers respond to tighter policy by purchasing fewer inputs. This is partly offset by an upstream cost channel, reflecting that suppliers raise prices to protect margins when financing costs rise. We inspect the mechanism in a multi-sector general equilibrium model with input-output linkages and working-capital constraints.
- 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
C67 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Input?Output Models
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
- 6 August 2026
- OCCASIONAL PAPER SERIES - No. 396Details
- Abstract
- This paper introduces reduced-form macroeconometric tools, emphasising quantile regression models, to identify key risk drivers for the euro area economy and assess risks around the baseline ECB/Eurosystem staff macroeconomic projections for the euro area inflation and growth. The analysis uses a large number of risk factors, going beyond the usual financial factors, employing a sequential selection approach with robustness checks. To support the analysis a MATLAB toolbox (M@RX) was developed, incorporating several quantile regression-based model classes with a novel parametric tilting methodology and a copula approach for transforming predictive densities across frequencies. This paper contributes to the literature on the treatment of the COVID-era data in quantile regression models. Results indicate that the predictive content of risk factors is horizon, time and objective-dependent. For example, labour market indicators are particularly relevant for assessing upside inflation risks, but to a time-varying extent and with limited predictive power for downside risks. Conversely, uncertainty, money and credit indicators perform better for downside inflation risks. As regards risks to growth, the results confirm the established role of financial conditions, while also highlighting the relevance of monetary indicators, particularly for downside risks. Combined risk factor frameworks – with several different risk indicators – tend to systematically outperform single-factor specifications for density forecasting, due to complementarities across risk indicator groups. An empirical application highlights the policy relevance of these tools, as they provide timely signals and accurately track the direction of realised outcomes. Given the time-varying and state-dependent nature of their predictive performance, a regular performance assessment of the specifications is recommended to maintain reliability.
- 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
C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods
E27 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Forecasting and Simulation: Models and Applications
E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications
- 6 August 2026
- ECONOMIC BULLETIN
- 6 August 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2026Details
- Abstract
- This box assesses the scope for euro area governments to adopt compensatory fiscal measures against the backdrop of the recent energy shock. It examines the available fiscal space, reviews the discretionary fiscal support provided so far, and assesses whether the current inflation environment has generated additional revenues that could partially finance current and future measures. The box concludes that, since fiscal space is more constrained than it was during the 2022 energy crisis and there is only modest scope for self-financing through inflation-driven revenues, it is all the more important for fiscal support to be temporary, targeted and tailored.
- JEL Code
- E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
C5 : Mathematical and Quantitative Methods→Econometric Modeling
- 6 August 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2026Details
- Abstract
- This box introduces the European Central Bank Broad Intermediation Gauge (ECB-BIG) index, a new indicator designed to provide a timely assessment of intermediation conditions in the euro area. The ECB-BIG index summarises information from a large set of variables covering bank and non-bank credit conditions, and complements indicators of more narrowly defined financial conditions. It also provides insights into the transmission of monetary policy to the real economy by measuring the impact of credit shocks on investment. Currently, the index is signalling a moderate tightening of credit conditions after the start of the war in the Middle East.
- 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
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
G20 : Financial Economics→Financial Institutions and Services→General
- 6 August 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2026Details
- Abstract
- This box assesses the anchoring of longer-term inflation expectations following the recent energy price shock using level, higher-moment and shock-sensitivity measures from surveys of consumers, firms and professional forecasters. A holistic approach reflecting the structurally different expectation patterns, uncertainty levels and biases of these different agents yields three main findings. First, level anchoring broadly holds, as the longer-term expectations of professional forecasters remain at 2%, while firms and consumers have revised their expectations upwards only modestly and still largely view the recent increase in inflation as temporary. Second, disagreement and high inflation tail risks remain contained relative to 2022-2023 peaks, although signals are weaker for consumers and firms than for professional forecasters. Third, while consumers (unlike professional forecasters) tend to revise longer-term expectations alongside short-term ones, longer-term expectations have not become more sensitive to short-term expectations since the outbreak of the war in the Middle East. Overall, longer-term inflation expectations appear to be broadly anchored but warrant continued close monitoring.
- JEL Code
- 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
E66 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→General Outlook and Conditions
D84 : Microeconomics→Information, Knowledge, and Uncertainty→Expectations, Speculations
- 6 August 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2026Details
- Abstract
- Have labour market prospects deteriorated more for young workers than for the aggregate labour market? This box analyses labour market developments across age and skill groups in relation to economic activity. It shows that in recent quarters young workers have indeed faced a more difficult job market. However, taking the relation with developments in real GDP into account, Okun's law residuals suggest that this weakness remains broadly in line with normal cyclical dynamics, also reflecting the higher sensitivity of young workers to the economic cycle and strong employment growth during the post-pandemic recovery.
- 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
J23 : Labor and Demographic Economics→Demand and Supply of Labor→Labor Demand
- 5 August 2026
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 5, 2026Details
- Abstract
- Economic uncertainty – the extent to which households, firms, investors and policymakers find it difficult to assess the economic outlook – has increased markedly in recent years with successive geopolitical and trade policy shocks. This article reviews recent developments in various proxies for uncertainty and shows that metrics capturing geopolitical and trade policy uncertainty have remained persistently elevated. The adverse impact of uncertainty shocks on business investment is typically larger and more persistent than the effect on private consumption. These results hold for different types of uncertainty measures, even when alternative empirical methods that employ external instruments are used. At the same time, a more granular assessment shows some differences across types of investment, with intangible investment generally being less sensitive to short-term uncertainty than tangible investment. Moreover, spending on durable goods and services is most strongly affected immediately after a rise in uncertainty, while the recovery in services spending is more protracted.
- JEL Code
- D81 : Microeconomics→Information, Knowledge, and Uncertainty→Criteria for Decision-Making under Risk and Uncertainty
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
- 5 August 2026
- WORKING PAPER SERIES - No. 3270Details
- Abstract
- We design an econometric framework to simulate multiple adverse macro-financial scenarios that can be used in top-down stress tests. First, we create a financial stress index informed by shocks generated via a non-parametric copula estimated on a large dataset of daily financial indicators. Second, we simulate the joint dynamics of macroeconomic indicators conditional on the copula-based financial shocks in a large multi-country Bayesian VAR model. This framework,which we refer to as the Multiple macro-financial stress scenario Simulation Engine, MuSE, allows us to replicate thousands of macro-financial stress scenarios where adverse shocks generated in the financial sector propagate into the overall economy, triggering significant macroeconomic fluctuations. We demonstrate its functionality by generating a large number of scenarios inspired from past crises capturing stress stemming from financial markets, sovereign debt, and geopolitical tensions. Using a top-down solvency stress test model, based on recent EU-wide stress tests, we project the capital depletion for euro area banks and find that adverse scenarios triggered by stock market and sovereign shocks appear to threaten the resilience of the euro area banking sector the most at this juncture.
- JEL Code
- C15 : Mathematical and Quantitative Methods→Econometric and Statistical Methods and Methodology: General→Statistical Simulation Methods: General
G01 : Financial Economics→General→Financial Crises
G17 : Financial Economics→General Financial Markets→Financial Forecasting and Simulation
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 5 August 2026
- WORKING PAPER SERIES - No. 3269Details
- Abstract
- We analyse whether textual information extracted from firms’ earnings calls can improve forecasts of the euro area job vacancy rate. Using transcripts from euro area headquartered firms, we construct a monthly indicator of labour demand based on keywords related to labour market pressures and include it into a mixed frequency Bayesian VAR alongside standard hard and soft indicators. A pseudo–real-time evaluation shows that earnings calls provide timely and valuable signals for tracking vacancy dynamics. Among soft indicators, factors limiting production deliver the largest forecasting gains, while real labour-market indicators such as unemployment add little once qualitative signals are included. Forecast improvements are largely driven by information from the manufacturing sector, whose signals prove substantially more informative than those from services, especially when paired with earnings calls. Taken together, our results highlight the usefulness of high-frequency text-based information for improving short-term labour-demand forecasts in the euro area.
- JEL Code
- C53 : Mathematical and Quantitative Methods→Econometric Modeling→Forecasting and Prediction Methods, Simulation Methods
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
E27 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Forecasting and Simulation: Models and Applications
- 4 August 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 5, 2026Details
- Abstract
- This box examines EU venture capital market developments and the implications for firm financing and growth. Venture capital in the EU remains limited in scale and fragmented across national markets, with gaps particularly evident at later stages of financing where they are partially filled by non-EU investors. Although venture capital from outside the EU can help firms expand, a strong reliance on external investors may reduce Europe’s ability to retain the economic gains generated by its entrepreneurial ecosystem. At the same time, venture capital in Europe appears broadly well targeted towards high-performing firms, suggesting significant potential to support growth. Policy action to deepen and integrate the EU venture capital ecosystem can therefore help strengthen the EU economy.
- JEL Code
- E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
- 4 August 2026
- WORKING PAPER SERIES - No. 3268Details
- Abstract
- Banks use their internal models to estimate capital requirements in a risk-sensitive way, subject to a set of rules laid down in banking regulation. However, these models are not flawless as the usage of models suffers from imperfections, such as oversimplifications or wrong assumptions. As a result, risks may be underestimated. This is particularly troublesome, where models are used to assess risks to banks’ solvency. In this paper we address an important gap in the literature with regard to such model risk. We find that a small set of high severity deficiencies in models is responsible for the majority of the counterfactual RWA burden imposed by supervisory capital add-ons. We trace the underlying non-compliances to a subset of CRR articles that mostly govern the handling of IRB-relevant data by banks. Our results help improve the supervision of IRB-banks by proposing more efficient use of scarce supervisory resources.
- 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
G29 : Financial Economics→Financial Institutions and Services→Other
Interest rates
| Deposit facility | 2.25 % |
| Main refinancing operations (fixed rate) | 2.40 % |
| Marginal lending facility | 2.65 % |
Inflation rate
More on inflationExchange rates
| USD | US dollar | 1.1605 | |
| JPY | Japanese yen | 184.62 | |
| GBP | Pound sterling | 0.85608 | |
| CHF | Swiss franc | 0.9402 |
Financial stability
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