Search Options
Home Media Explainers Research & Publications Statistics Monetary Policy The €uro Payments & Markets Careers
Suggestions
Sort by

SPEECH

Strengthening European financial markets

Financial integration has supported the euro area’s resilience in the face of shocks, but urgent action is needed to address the challenges ahead, says Vice-President Luis de Guindos. Advancing the capital markets union and completing the banking union remain a priority.

Read the speech
MACROPRUDENTIAL BULLETIN 20 June 2024

Costs and benefits of a positive neutral rate

The early build-up of the countercyclical capital buffer through a positive neutral rate allows macroprudential authorities greater margin to support the economy in the event of shocks. The resulting more gradual build-up of the buffer also reduces the costs for the economy.

Read our latest Macroprudential Bulletin
ECONOMIC BULLETIN 20 June 2024

ECB publishes Economic Bulletin

This publication presents the economic and monetary information which forms the basis for the Governing Council’s policy decisions. It is released eight times a year, two weeks after each monetary policy meeting.

Read the new Economic Bulletin
PODCAST 10 June 2024

Ask the ECB

Is there something you’ve always wanted to ask us? Now’s your chance! Send us your questions by Sunday, 23 June for the chance to feature on our #AskECB edition of The ECB Podcast. Find out more on our Instagram channel.

Ask us via Instagram
23 June 2024
Slides by Isabel Schnabel, Member of the Executive Board of the ECB, on the occasion of the conferral of the Weltwirtschaftlicher Preis 2024 to her by the Kiel Institut für Weltwirtschaft
English
OTHER LANGUAGES (1) +
Select your language
18 June 2024
Keynote speech by Luis de Guindos, Vice-President of the ECB, at the Joint Conference of the European Commission and the ECB on European Financial Integration
14 June 2024
Speech by Christine Lagarde, President of the ECB, at the 30th Dubrovnik Economic Conference
12 June 2024
Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Finance Committee of the German Bundestag in Berlin
English
OTHER LANGUAGES (1) +
Select your language
11 June 2024
Dinner speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the 2024 Annual ECB Banking Supervision Research Conference
11 June 2024
Interview with Christine Lagarde, President of the ECB, conducted by Andrés Stumpf, Stefan Reccius, Isabella Bufacchi, Guillaume Benoit and Alexandre Counis in Paris on 7 June 2024
English
OTHER LANGUAGES (4) +
27 May 2024
Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Martin Arnold on 24 May 2024
24 May 2024
Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Steffen Clement on 16 May 2024
English
OTHER LANGUAGES (1) +
Select your language
23 May 2024
Interview with Luis de Guindos, Vice-President of the ECB, conducted by Dietmar Mascher and Alexander Zens
English
OTHER LANGUAGES (1) +
Select your language
17 May 2024
Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Shogo Akagawa and Takerou Minami on 13 May 2024
18 June 2024
With the reduction of the Eurosystem’s balance sheet, central bank liquidity is declining. As liquidity is unevenly distributed among banks, an effective redistribution and use of market funding are essential. This worked well so far, with limited recourse to Eurosystem’s refinancing operations.
Details
JEL Code
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
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
13 June 2024
Many people appreciate privacy when paying, and want their data protected. Current electronic means of payment are not optimal in this regard. We are designing the digital euro to be the most private electronic payment option. The ECB Blog explains.
Details
JEL Code
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E49 : Macroeconomics and Monetary Economics→Money and Interest Rates→Other
E59 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Other
G29 : Financial Economics→Financial Institutions and Services→Other
12 June 2024
More reforms are needed if the euro is to maintain and strengthen its role amid geopolitical shifts. Europe needs to further develop the infrastructure for making cross-border payments in euro with key partners.
Details
JEL Code
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
F02 : International Economics→General→International Economic Order
F01 : International Economics→General→Global Outlook
F31 : International Economics→International Finance→Foreign Exchange
F33 : International Economics→International Finance→International Monetary Arrangements and Institutions
8 June 2024
The ECB has cut interest rates. President Christine Lagarde explains why and sets out what still needs to be done to bring inflation back to 2% over the medium term.
Details
JEL Code
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E60 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→General
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
23 May 2024
Negotiated wage growth in the euro area increased in the first quarter of 2024. This post on The ECB Blog illustrates how the ECB wage tracker can help to put latest developments in negotiated wage growth into perspective.
Details
JEL Code
E20 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→General
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
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
11 March 2024
STATISTICS PAPER SERIES - No. 47
Details
Abstract
The Harmonised Index of Consumer Prices (HICP) currently only includes rentals for housing (paid by tenants) and auxiliary housing expenditures (paid by both tenants and owners). The inclusion of an item for owner-occupied housing (OOH) would be desirable for both representativeness and cross-country comparability. This paper reviews the potential options for including OOH in the HICP to derive a new inflation index. We discuss the conceptual and measurement issues involved. Additionally, we present our analytical calculations on the impact and economic properties of this index as compared to the HICP. We show that since 2011 the estimated impact of including OOH in HICP annual inflation, based on either the “net acquisition” approach or the “rental equivalence” approach, would have been within a band of between -1.2 and +0.4 percentage points. The net acquisition approach could result in bigger differences in future, should the fluctuations in the housing market cycles in the euro area be more pronounced and synchronised. The results should be interpreted keeping in mind that the period of observation is relatively short in relation to housing market cycles. In general, the empirical evidence suggests that including OOH based on the rental equivalence approach decreases the cyclicality of the new inflation index, while the net acquisition approach implies a small amplification of its cyclical properties compared to the HICP.
JEL Code
C43 : Mathematical and Quantitative Methods→Econometric and Statistical Methods: Special Topics→Index Numbers and Aggregation
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
20 June 2024
ECONOMIC BULLETIN
20 June 2024
MACROPRUDENTIAL BULLETIN - ARTICLE
Details
Abstract
This article explores the benefits of a positive neutral rate for the countercyclical capital buffer (CCyB) and the conditions shaping the economic costs of its activation in a general equilibrium framework. The analysis shows that a gradual build-up of the buffer and favourable banking sector conditions (e.g. high profitability) limit these economic costs. Furthermore, a positive neutral CCyB rate ensures banking sector resilience in all phases of the financial cycle and improves macroprudential authorities’ ability to provide relief to the banking sector in the event of (potentially large) shocks, including those unrelated to the materialisation of domestic credit imbalances.
JEL Code
C68 : Mathematical and Quantitative Methods→Mathematical Methods, Programming Models, Mathematical and Simulation Modeling→Computable General Equilibrium Models
E61 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Policy Objectives, Policy Designs and Consistency, Policy Coordination
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
20 June 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2024
Details
Abstract
This box investigates the factors underlying the growing, but still moderate, deterioration in bank credit quality against the backdrop of weak economic activity, rising interest rates and increases in the number of corporate bankruptcies. First, drawing on granular credit register data, we show that banks have actively rebalanced their loan portfolios towards safer assets, potentially curbing a build-up of credit risk on their balance sheets. Second, we explore the possibility that banks exercised greater caution in credit allocation as a result of regulatory considerations, and we assess the impact of bank balance sheet strength and resilience before the start of the recent monetary policy tightening cycle on their credit allocation strategies. Our findings suggest that regulatory pressures are relevant in the reallocation of credit from riskier to safer borrowers, while balance sheet strength and resilience prior to the tightening cycle did not significantly influence credit allocation patterns.
JEL Code
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
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G35 : Financial Economics→Corporate Finance and Governance→Payout Policy
20 June 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2024
Details
Abstract
This box describes liquidity conditions and the Eurosystem monetary policy operations during the first and second maintenance periods of 2024, from 31 January to 16 April 2024.
JEL Code
E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→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
20 June 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2024
Details
Abstract
Standard indicators of profits in the economy derived from national accounts are based on GDP rather than on output and therefore do not consider the role of intermediate consumption. Differences between GDP-based and output-based profit indicators can be pronounced when there are exceptional developments in the cost of intermediate consumption, as recently observed. This box therefore proposes a new profit indicator based on total supply, which is a measure that corresponds more closely to output than GDP. Taken together, the GDP-based and total supply-based profit margin indicators suggest that in 2023 profits started to buffer the impact of labour cost developments on price pressures, but benefited from the decline in other costs.
JEL Code
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
20 June 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2024
Details
Abstract
This box evaluates perceived risks and sentiment in the euro area using evidence from corporate earnings calls. The results are particularly informative when assessing how firms perceive the repercussions of severe global shocks. Risk perceptions in the euro area remain higher than in other economies and than before the COVID-19 pandemic. Meanwhile, demand sentiment and supply sentiment have broadly normalised in recent quarters.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D81 : Microeconomics→Information, Knowledge, and Uncertainty→Criteria for Decision-Making under Risk and Uncertainty
E66 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→General Outlook and Conditions
19 June 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2024
Details
Abstract
Growth has been notably weaker in the euro area than in the United States for decades. This box considers several factors that have contributed to the difference observed since the start of the pandemic, reflecting the fact that the euro area has seen less of a stimulus from private consumption, coupled with weaker labour productivity growth. The euro area has also felt a greater impact from the pandemic and Russia’s war against Ukraine. There is mixed evidence of the monetary policy impacts on activity in these two regions, albeit spillovers from the United States to the euro area appear larger than in the other direction. With regard to differences in fiscal policy, while accurate comparisons are difficult to draw, the fiscal policy impulse over 2020-23 was relatively similar in the two regions, whereas the overall level of the budget deficit was much larger in the United States.
JEL Code
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
O47 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Measurement of Economic Growth, Aggregate Productivity, Cross-Country Output Convergence
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
19 June 2024
ECONOMIC BULLETIN - ARTICLE
Economic Bulletin Issue 4, 2024
Details
Abstract
This article discusses the challenges for public finances arising from (i) demographic ageing, (ii) increases in defence expenditure, (iii) digitalisation and (iv) climate change. While these changes are likely to occur, the associated fiscal costs are difficult to estimate with precision. Nonetheless, as far as possible prudent fiscal policy should already be taking these into account.
JEL Code
H68 : Public Economics→National Budget, Deficit, and Debt→Forecasts of Budgets, Deficits, and Debt
J11 : Labor and Demographic Economics→Demographic Economics→Demographic Trends, Macroeconomic Effects, and Forecasts
H56 : Public Economics→National Government Expenditures and Related Policies→National Security and War
18 June 2024
WORKING PAPER SERIES - No. 2948
Details
Abstract
This paper studies the pass-through from wages to producer prices using sectoral disaggregated data for the euro area. We find a positive and statistically significant wage-price pass-through that reaches 50% after three years, which differs across sectors. The wage-price pass-through in private servicesis significantly higher than in industry and takes longer before reaching its peak. While a higher labour intensity is a key component of the pass-through, our estimates indicate that differences in sectoral labour shares alone cannot explain the larger wage-price pass-through in private services compared to industry. Instead, the estimates hint at an important role for international competition in the domestic market for the tradeable sector. They also suggest that the sales destination matters: wage growth contributes to domestic inflation for goods but not to export inflation. Finally, we also provide evidence of an increase in the wage-price pass-through after 2020, particularly in private services.
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
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
18 June 2024
WORKING PAPER SERIES - No. 2947
Details
Abstract
This paper studies how the Covid-19 pandemic and the extensive job retention support that accompanied it affected productivity in Europe. The focus is on the reallocation channel and productivity-enhancing reallocation of jobs, following Foster et al., 2016. An extensive micro-distributed analysis of firm-level data for 11 euro area countries is used. The unique firm-level datasets are constructed by merging balance-sheet and income-statement data with policy support data. The paper exploits variation in employment responsiveness to productivity over time, particularly examining the relationship between changes in employment responsiveness and the job retention support in 2020 and studying how well the support was targeted by firm productivity. Acknowledging limitations of a small set of countries covered and occasionally large confidence bounds around estimates, the findings suggest that (1) productivity-enhancing reallocation was weaker in the pandemic than in the Great Recession; (2) The countries that were more generous with job retention support and countries where more support was allocated to low-productivity firms showed weaker productivity-enhancing reallocation in 2020.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
H25 : Public Economics→Taxation, Subsidies, and Revenue→Business Taxes and Subsidies
J38 : Labor and Demographic Economics→Wages, Compensation, and Labor Costs→Public Policy
L29 : Industrial Organization→Firm Objectives, Organization, and Behavior→Other
18 June 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 4, 2024
Details
Abstract
Since the start of 2018 automotive production and exports in the euro area have both contracted by about 20%, while they have fared better in China, Japan, Korea and the United States. The current weakness is mostly a result of declining demand for combustion engines in the context of net zero emission targets and hesitancy to purchase hybrid and electric vehicles. Other factors, such as supply chain disruptions, adverse energy supply shocks and monetary tightening have also negatively contributed to the drop in automotive production. Despite intensified foreign competition, the euro area automotive industry has defended its global positioning by focusing on profitable market segments. A recovery can be expected in the medium term as adverse factors related to supply bottlenecks and tight financing conditions fade away. However, risks to the outlook are elevated. These are associated with the digital innovation gap vis-a-vis the United States and China as well as geopolitical tensions, which can disrupt supply chains.
JEL Code
E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
F1 : International Economics→Trade
L62 : Industrial Organization→Industry Studies: Manufacturing→Automobiles, Other Transportation Equipment
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE IN THE EURO AREA
Annexes
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE IN THE EURO AREA
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
The European Union's FinTech industry has experienced rapid growth since the 2010’s, with a significant concentration of firms in major financial centers. This Box suggests that one of the reasons for the clustering of FinTechs close to financial centres may be easier access to equity finance. The analysis also shows that FinTechs outside financial centres compared to Fintechs that cluster in financial centers need to rely more on their performance as a signalling device to potential funding providers. Given the relevance of incubators and accelerators for early-stage development and funding of FinTech startups, the article points to the need to further investigate the role and effectiveness of institutional support schemes. It also underscores the need to advance on the EU’s capital markets union (CMU) agenda, in particular as regards policy efforts to grow European equity markets, in terms of both liquidity and depth.
JEL Code
D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
G3 : Financial Economics→Corporate Finance and Governance
O30 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→General
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
In view of recent high-profile delistings from European stock exchanges and the widening gap in listings compared to the US, this Box sheds more light on the gap in listings between the United States and Europe. It examines the reasons behind the delisting activities of EU companies and identifies mergers and acquisitions as the key determinant over time, including in recent years. In addition, an examination of the trends of dual and US listings of European firms suggests a growing attractiveness of US markets for European firms. This suggests that policy measures may be needed to make EU listings more appealing, particularly for larger companies, by enhancing market depth and liquidity and possibly further consolidating European stock exchanges.
JEL Code
G10 : Financial Economics→General Financial Markets→General
G15 : Financial Economics→General Financial Markets→International Financial Markets
G34 : Financial Economics→Corporate Finance and Governance→Mergers, Acquisitions, Restructuring, Corporate Governance
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
The issuance of these temporary recovery instruments has renewed the discussion on the benefits of a common safe asset and their transformative potential for EU financial integration. Given that a common safe asset may foster financial integration in the euro area by facilitating diversification and de-risking banks’ sovereign portfolios, this box assesses the extent to which these newly issued EU bonds (i) are perceived by market participants as a common safe asset, and (ii) can facilitate diversification and affect banks’ sovereign portfolio composition.
JEL Code
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
H63. : Public Economics→National Budget, Deficit, and Debt→Debt, Debt Management, Sovereign Debt
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
The box highlights the importance of cross-border bank lending to non-banks in the euro area. Comparing the domicile of euro area banks and borrowers, we estimate the scale of direct cross-border lending to represent 14.1% of euro area bank lending to non-banks which increases to 23% when we include indirect cross-border lending. Direct cross-border lending represents an important driver for enhancing banking market integration. It also constitutes an instrument to improve banks’ risk diversification and the resilience of borrowers’ funding structure. Finally, the box discusses the implications of different lending approaches, and sheds light on the sectors relying more on cross-border lending.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
F02 : International Economics→General→International Economic Order
F34 : International Economics→International Finance→International Lending and Debt Problems
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
O52. : Economic Development, Technological Change, and Growth→Economywide Country Studies→Europe
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
European banks often borrow in repo markets, pledging domestic government bonds as collateral. As there tends to be a positive relation between the default risk of a bank and the default risk of its home country, using domestic collateral comes at a cost. Using transaction-level data on short-term repurchase agreements (repo) and taking into account the direct effect of collateral and borrower risk, we show that borrowers pay a premium of 1.1 to 2.6 basis points when they use domestic collateral. Additionally, we show that borrowers internalize this premium when making their collateral choices.
JEL Code
G21, G12, E43 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
This box reassesses the patterns of euro area financial integration, adjusting for the role of financial centres in the euro area. Their special role involves acting as one of the euro area’s major hubs for (i) the investment fund industry, and (ii) securities issuance by affiliates of foreign companies. Looking through these dual roles of euro area financial centres provides a nuanced picture of euro area financial integration and portfolio exposures. The restatements methodology reveals three main findings namely that (i) the euro area as a whole is less financially integrated with the rest of the world (ii) at the country level Luxembourg and Ireland act as a source of portfolio diversification for the other euro area countries and (iii) the evolution of equity home bias in the euro area looks very similar to that of the United States since 1995, while euro area bond home bias declined significantly.
JEL Code
F3 : International Economics→International Finance
F4 : International Economics→Macroeconomic Aspects of International Trade and Finance
G2 : Financial Economics→Financial Institutions and Services
G3 : Financial Economics→Corporate Finance and Governance
H26 : Public Economics→Taxation, Subsidies, and Revenue→Tax Evasion
18 June 2024
FINANCIAL INTEGRATION AND STRUCTURE BOX
Financial Integration and Structure in the Euro Area 2024
Details
Abstract
The United Kingdom’s decision to leave the EU impacted the EU’s financial infrastructure, in particular those financial market segments heavily reliant on UK clearing services. This box analyses how the market shares of euro area CCPs offering similar clearing services to their UK competitors have evolved since Brexit. Although the market share of euro area CCPs has increased over time, the over-reliance of domestic market participants on non-euro area clearing services persists. This could have serious implications for the financial stability of the EU, especially under stressed market conditions. Reducing the reliance of European markets on third countries for the provision of critical clearing services remains a priority for EU policymakers from a financial stability perspective, together with building well-integrated, resilient clearing markets in the EU.
JEL Code
G15 : Financial Economics→General Financial Markets→International Financial Markets
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
F36 : International Economics→International Finance→Financial Aspects of Economic Integration

Interest rates

Marginal lending facility 4,50 %
Main refinancing operations (fixed rate) 4,25 %
Deposit facility 3,75 %
12 June 2024 Past key ECB interest rates