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Since 1 January 1999 the European Central Bank (ECB) has been responsible for conducting monetary policy for the euro area - the world’s largest economy after the United States.

Articles by European Central Bank

Philip R. Lane: Q&A with Bloomberg

3 days ago

Q&A with Philip R. Lane, Member of the Executive Board of the ECB, on 16 September 2019 at Bloomberg in LondonThe following is a transcript of an on stage question and answer following Mr Lane’s speech, Reflections on monetary policy. I did take the precaution of inviting mainly economists today, so I think they will have found your speech very exciting and interesting. Whether a broader cross-section of London would have had the same reaction, we don’t know, but it doesn’t matter. You’ve often said, particularly in times of unconventional policies, how important communications are for monetary policy. A lot of the communications that we’ve been talking about over the last few days, since the package was announced, have been negative communications from members of the Council who have made

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Benoît Cœuré: Digital challenges to the international monetary and financial system

5 days ago

SPEECHPanel remarks by Benoît Cœuré, Member of the Executive Board of the ECB, at the Banque centrale du Luxembourg-Toulouse School of Economics conference on “The Future of the International Monetary System”, Luxembourg, 17 September 2019Luxembourg, 17 September 2019When[1] the euro was created 20 years ago it was hailed as one of the most important turning points in the history of the international monetary system since the demise of the Bretton Woods system.[2] Many observers saw the euro as a natural contender to rival the supremacy of the US dollar in the global monetary and financial system. After all, the euro area was (and remains) the world’s largest trading bloc.[3]The remarkable rise of China in the global economy, its expanding role in international trade, and the inclusion of

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Philip R. Lane: Reflections on monetary policy

6 days ago

Keynote speech by Philip R. Lane, Member of the Executive Board of the ECB, at Bloomberg, London, 16 September 2019I will divide this speech into two parts. First, I wish to review the current economic and financial environment. Second, I will discuss the monetary policy decisions taken by the Governing Council in last week’s meeting.[1]Incoming information is signalling a more extended slowdown in euro area growth dynamics than previously expected. As I will discuss, this slowdown is mainly due to external developments. While domestic demand is resilient, persistent uncertainties related to protectionist policies and geopolitical factors are taking a toll on economic sentiment and are clearly weighing on the euro area manufacturing sector.On the international front, the latest survey data

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ECB provides additional details on purchases of assets with yields below the deposit facility rate

10 days ago

PRESS RELEASE12 September 2019ECB extends possibility of buying assets with yields below deposit facility rate to all private sector purchase programmesDecision takes immediate effectExtension facilitates smooth implementation of asset purchase programmeThe Governing Council of the European Central Bank (ECB) today decided to extend the possibility of buying assets with yields below the interest rate on the deposit facility, to the extent necessary, under all parts of its asset purchase programme (APP).The Governing Council had previously decided, in January 2017, that purchases of assets with yields below the deposit facility rate could take place under the public sector purchase programme (PSPP). Today’s decision extends this possibility to the private sector parts of the APP, namely the

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ECB announces changes to new targeted longer-term refinancing operations (TLTRO III)

10 days ago

PRESS RELEASE12 September 2019Interest rate on TLTRO III operations to be reducedRate can be as low as the average interest rate on deposit facilityMaturity extended to three years, from two years, with repayment option after two yearsThe Governing Council of the European Central Bank (ECB) today decided to modify some of the key parameters of the third series of targeted longer-term refinancing operations (TLTRO III) to preserve favourable bank lending conditions, ensure the smooth functioning of the monetary policy transmission mechanism and further support the accommodative stance of monetary policy.First, in terms of the pricing of TLTRO III, the previously announced 10-basis point spread above the average interest rate of the Eurosystem’s main refinancing operations (MROs) and, for

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Mario Draghi, Luis de Guindos: Introductory statement to the press conference (with Q&A)

10 days ago

Mario Draghi, President of the ECB,Luis de Guindos, Vice-President of the ECB,Frankfurt am Main, 12 September 2019INTRODUCTORY STATEMENTJump to the transcript of the questions and answersLadies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council.Based on our regular economic and monetary analyses, we have conducted a thorough assessment of the economic and inflation outlook, also taking into account the latest staff macroeconomic projections for the euro area. As a result, the Governing Council took the following decisions in pursuit of its price stability objective.First, as regards the key ECB interest rates, we decided to lower the interest rate on the deposit

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ECB introduces two-tier system for remunerating excess liquidity holdings

10 days ago

PRESS RELEASE12 September 2019Two-tier system aims to support bank-based transmission of monetary policy Part of excess liquidity holdings exempt from negative deposit facility rateScheme to apply as of seventh maintenance period starting on 30 October 2019Exempt tier will be remunerated at the annual rate of 0%The Governing Council of the European Central Bank (ECB) today decided to introduce a two-tier system for reserve remuneration, which exempts part of credit institutions’ excess liquidity holdings (i.e. reserve holdings in excess of minimum reserve requirements) from negative remuneration at the rate applicable on the deposit facility. This decision aims to support the bank-based transmission of monetary policy, while preserving the positive contribution of negative rates to the

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Monetary policy decisions

10 days ago

PRESS RELEASE12 September 2019At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:(1) The interest rate on the deposit facility will be decreased by 10 basis points to -0.50%. The interest rate on the main refinancing operations and the rate on the marginal lending facility will remain unchanged at their current levels of 0.00% and 0.25% respectively. The Governing Council now expects the key ECB interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2% within its projection horizon, and such convergence has been consistently reflected in underlying inflation dynamics. (2) Net purchases will be restarted under the Governing Council’s asset

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Luis de Guindos: Growth and competitiveness in the euro area

15 days ago

Panel contribution by Luis de Guindos, Vice-President of the ECB, at The European House-Ambrosetti Forum, Cernobbio, 7 September 2019Growth, investment and competitiveness are topics of utmost relevance for monetary policy. Investment trends and productivity growth are key determinants of the potential growth rate of the economy. Measurement challenges aside, the resulting output gap – the deviation of actual economic activity from its potential – is a key driver of inflation over the short and medium term. Today I will focus on the factors behind weak investment and productivity, on the remaining barriers to competition and on the importance of deepening Economic and Monetary Union (EMU) and completing the capital markets union (CMU) to enhance the attractiveness of the euro area.Let me

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Luis de Guindos: The evolution of stress-testing in Europe

18 days ago

Keynote speech by Luis de Guindos, Vice-President of the ECB, at the annual US-EU Symposium organised by the Program on International Financial Systems, Frankfurt, 4 September 2019IntroductionDuring the financial crisis, stress tests were primarily used to identify capital shortfalls in the banking sector and to enhance market discipline. This was achieved through the publication of consistent and granular data on a bank‐by‐bank basis, with banks judged to have either “passed” or “failed” the test.Since the crisis, the way in which stress tests are used has evolved, both in Europe and abroad. They have become a key part of the supervisory and financial stability toolkit for assessing risk profiles and performance under adverse macroeconomic conditions. In the United States, the regular

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Yves Mersch: Appointment hearing as Vice-Chair of the ECB Supervisory Board

18 days ago

Appointment hearing of Yves Mersch, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European Parliament, Brussels, 4 September 2019Following my nomination by the ECB’s Governing Council as candidate for the position of Vice-Chair of the ECB’s Supervisory Board, I am grateful for this opportunity to outline the key principles that I intend to bring to the role.I have spent more than 20 years of my career dealing with microprudential supervision in various roles, first at Luxembourg’s Monetary Institute and Finance Ministry, and then as Governor of its Central Bank. During that time I helped to develop the template for modern banking supervision in my country – but I also witnessed the challenges national supervisors can face in a monetary

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Yves Mersch: Money and private currencies: reflections on Libra

20 days ago

Speech by Yves Mersch, Member of the Executive Board of the ECB, at the ESCB Legal Conference, Frankfurt am Main, 2 September 2019In 1787, during the debates on adopting the US Constitution, James Madison stated that “[t]he circulation of confidence is better than the circulation of money”. It’s telling that Madison chose to use public trust in money as the yardstick for trust in public institutions – money and trust are as inextricably intertwined as money and the state. Money is an “indispensable social convention” that can only work if the public trusts in its stability and acceptability and, no less importantly, if the public has confidence in the resolve of its issuing authorities to stand behind it, in bad times as well as in good. Madison’s 18th century remark on the link between

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Sabine Lautenschläger: Interview with Market News

23 days ago

Interview with Sabine Lautenschläger, Member of the Executive Board of the ECB, conducted by Luke Heighton on 28 August, and published on 30 August 2019The account of last month’s monetary policy meeting of the Governing Council showed the ECB has become more pessimistic in its assessment of the eurozone growth and inflation outlook over the longer term, to the extent that the baseline growth scenario may need to be revised. How worried are you? There is, indeed, some increasing uncertainty based in particular on political shocks such as the trade tensions and Brexit. Also in Germany there is a downward trend in the manufacturing sector. But we also see signals of strengths in the euro area, for instance positive trends in the labour market and a resilience of the overall domestic growth.

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Luis de Guindos: Communication, expectations and monetary policy

26 days ago

Intervention by Luis de Guindos, Vice-President of the ECB, at the ECB policy panel of the Annual Congress of the European Economic Association, Manchester, 27 August 2019Introduction Ladies and Gentlemen,Every year, the ECB organises a policy panel at the Annual Congress of the European Economic Association. The intention of these panels is to combine the results of research and the views of policy makers to advance our thinking on a topic of great policy relevance. This year, it has been straightforward to decide on such a topic. Communication and expectations are central to the conduct of monetary policy, and there is a substantial body of research that allows us to have an informed discussion on the topic. It is therefore a great pleasure for me to speak at this year’s policy panel.

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Account of the monetary policy meeting

August 22, 2019

Of the Governing Council of the European Central Bank, held in Frankfurt am Main on Wednesday and Thursday, 24-25 July 20191. Review of financial, economic and monetary developments and policy options Financial market developmentsMr Cœuré reviewed the financial market developments since the Governing Council’s previous monetary policy meeting on 5-6 June 2019. Sovereign bond yields had temporarily fallen to multi-year lows in the United States, the United Kingdom and Japan, and to new record lows in large parts of the euro area. Econometric evidence suggested that expectations of further global monetary policy easing had been the main driver behind the fall in euro area ten-year overnight index swap (OIS) rates since the start of 2019.Developments in the EONIA forward curve indicated that

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ECB European Cultural Days 2019: Celebrating 20 years of the euro

August 21, 2019

PRESS RELEASE21 August 2019Europa Open Air concert draws over 20,000 music lovers every yearAlte Oper to start new season with young musicians from Gustav Mahler JugendorchesterCharity concert in support of “Basketball macht Schule” youth initiativeECB to open doors to chamber music Since its launch in 2003 the European Cultural Days of the ECB has featured artists from 15 EU countries. This year’s events mark the euro’s 20th anniversary and will be dedicated to Europe. Four concerts, including an open air riverside concert and a chamber music evening at the ECB, will bring a wide variety of music – ranging from Beethoven to jazz – to Frankfurt.“Twenty years ago we introduced the euro, the most tangible symbol of Europe and its values. The European Cultural Days 2019 will celebrate this

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Private sector working group issues recommendations on the transition from EONIA to €STR for cash and derivatives products

August 19, 2019

PRESS RELEASE19 August 2019Transition from EONIA to €STR has impact on broad variety of financial products and processesMarket participants urged to actively prepare for change in publication time of EONIA effective as of 2 October 2019CCPs encouraged to switch their discounting regime from EONIA to €STR towards end of second quarter of 2020The private sector working group on euro risk-free rates has today published a report containing a set of recommendations addressing the impact of the transition from the euro overnight index average (EONIA) to the euro short-term rate (€STR). The recommendations take an operational and valuation perspective, taking into account EONIA’s wide use as a reference rate and as a collateral remuneration and cash flow discounting rate. The report analyses the

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ECB shuts down compromised BIRD website

August 15, 2019

PRESS RELEASE15 August 2019ECB’s BIRD website hacked by unauthorised partiesEmail addresses and other contact data may have been capturedNo internal systems or market-sensitive data compromisedBIRD website shut down until further noticeThe European Central Bank (ECB) said on Thursday that unauthorised parties had breached the security measures protecting its Banks’ Integrated Reporting Dictionary (BIRD) website, which is hosted by an external provider. As a result, it was possible that the contact data (but not the passwords) of 481 subscribers to the BIRD newsletter may have been captured. The affected information consists of the email addresses, names and position titles of the subscribers. The ECB is contacting people whose data may have been affected. The breach succeeded in injecting

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ECB publishes indicative calendars for the Eurosystem’s regular tender operations and reserve maintenance periods in 2020

August 9, 2019

PRESS RELEASE9 August 2019ECB publishes indicative tender calendar for 2020ECB publishes indicative reserve maintenance period calendar for 2020 The European Central Bank (ECB) has today published the indicative calendars for the Eurosystem’s regular tender operations and reserve maintenance periods in 2020.The indicative calendar for the Eurosystem’s regular tender operations includes only main refinancing operations (MROs) and three-month longer-term refinancing operations (three-month LTROs). It does not include any supplementary or ad hoc operations which may be carried out in 2020. The calendar can be downloaded from the ECB’s website.The indicative calendar for the Eurosystem’s reserve maintenance periods takes into account the calendar for Governing Council meetings in 2020, as well

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ECB publishes Consolidated Banking Data for end-March 2019

August 7, 2019

Press release7 August 2019Chart 1Total assets of credit institutions headquartered in the euro area and the EU(EUR billions)Chart 2Non-performing loans ratio of credit institutions headquartered in the euro area and the EU(percentage)The European Central Bank (ECB) has published the Consolidated Banking Data (CBD) with reference to end-March 2019, a data set of the European Union (EU) banking system compiled on a group consolidated basis.The quarterly CBD cover relevant information required for the analysis of the EU banking sector, comprising a subset of the information that is available in the end-year dataset. The end-March 2019 data refer to 378 banking groups and 2,769 stand-alone credit institutions operating in the EU (including foreign subsidiaries and branches), covering nearly

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Results of the June 2019 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD)

July 31, 2019

PRESS RELEASE31 July 2019Credit terms eased for almost all counterparties between March and May 2019The maximum amount of funding collateralised with euro-denominated securities declined, especially where government and covered bonds were used as collateralDemand for funding continued to decline across all types of collateralIn both the securities financing market and the OTC derivatives market, credit terms offered to almost all counterparties eased between March and May 2019. An improvement in liquidity conditions and market functioning, stronger competitive pressures from other institutions and increased balance sheet availability were the main drivers of this development. Looking ahead, a small net percentage of respondents expect price terms to continue easing for most counterparty

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ECB publishes legal acts relating to targeted longer-term refinancing operations (TLTROs)

July 29, 2019

PRESS RELEASE29 July 2019ECB defines the conditions for participation in TLTRO III and other operational aspectsECB introduces a change to the notification period of voluntary early repayments for TLTRO IIThe European Central Bank (ECB) today publishes a legal act adopted on 22 July 2019 relating to the third series of targeted longer-term refinancing operations (TLTRO III). TLTRO III operations will help to preserve favourable bank lending conditions and support the accommodative stance of monetary policy.Decision ECB/2019/21 of 22 July 2019 on a third series of targeted longer-term refinancing operations defines the conditions for participation in TLTRO III and other operational aspects.The ECB also publishes Decision ECB/2019/22 of 22 July 2019 amending Decision ECB/2016/10 on a second

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Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest rates)

July 26, 2019

July 2019External communicationExpiry of the fourth Central Bank Gold AgreementOn 26 July 2019 the ECB announced that the signatories of the Central Bank Gold Agreement had concluded that a formal gold agreement would no longer be necessary after its expiry on 26 September 2019. This decision is without prejudice to each national central bank’s competences regarding the management of its own gold reserves. More detailed information can be found in a related press release available on the ECB’s website.Market operationsBusiness process and legal framework for the production of the euro short-term rate On 10 July 2019 the Governing Council approved the business process for the production of the euro short-term rate (€STR), in particular the publication of the €STR on each TARGET2 business

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As market matures central banks conclude that a formal gold agreement is no longer necessary

July 26, 2019

PRESS RELEASE26 July 2019Signatories of the fourth Central Bank Gold Agreement no longer see need for formal agreement as market has developed and matured Signatory central banks confirm gold remains an important element of global monetary reserves and none of them currently has plans to sell significant amounts of goldThe European Central Bank (ECB) and 21 other central banks that are signatories of the Central Bank Gold Agreement (CBGA) have decided not to renew the Agreement upon its expiry in September 2019.The first CBGA was signed in 1999 to coordinate the planned gold sales by the various central banks. When it was introduced, the Agreement contributed to balanced conditions in the gold market by providing transparency regarding the intentions of the signatories. It was renewed

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Results of the Q3 2019 ECB Survey of Professional Forecasters

July 26, 2019

PRESS RELEASE26 July 2019[updated on 26 July 2019 at 16:30 CET]Inflation expectations revised down by 0.1 p.p. at all horizonsReal GDP growth expectations broadly unchangedUnemployment rate expectations revised downRespondents to the ECB Survey of Professional Forecasters (SPF) for the third quarter of 2019 reported point forecasts for annual HICP inflation averaging 1.3%, 1.4% and 1.5% for 2019, 2020 and 2021, respectively. These results represent downward revisions of 0.1 percentage points (p.p.) for each of those years compared with the previous (Q2 2019) survey round. Average longer-term inflation expectations (which, like all other longer-term expectations in this SPF, refer to 2024) declined from 1.8% to 1.7%.SPF respondents’ expectations for growth in euro area real GDP averaged

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Euro banknote counterfeiting decreased further in the first half of 2019

July 26, 2019

PRESS RELEASE26 July 2019251,000 counterfeit euro banknotes were withdrawn from circulation in the first half of 2019 Over 80% of those counterfeits were €20 and €50 banknotesEuro banknotes continue to be a trusted and safe means of paymentAll euro banknotes can be verified using the “feel, look and tilt” method Some 251,000 counterfeit euro banknotes were withdrawn from circulation in the first half of 2019, a decrease of 4.2% when compared with the second half of 2018 and 16.6% less than in the first half of 2018. The likelihood of receiving a counterfeit is very small indeed as the number of counterfeits remains very low compared with the number of genuine banknotes in circulation, which has risen steadily at rates in excess of GDP growth since they were first introduced. In 2018 the

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ECB adopts opinion on appointment of its future President

July 25, 2019

PRESS RELEASE25 July 2019Governing Council has no objection to proposed candidate Christine Lagarde The Governing Council of the European Central Bank (ECB) today adopted an opinion on the recommendation from the Council of the European Union on the appointment of the future ECB President.The Governing Council has no objection to the proposed candidate, Christine Lagarde, who is a person of recognised standing and professional experience in monetary or banking matters, as required by Article 283(2) of the Treaty on the Functioning of the European Union. Ms Lagarde took up the role of International Monetary Fund (IMF) Managing Director in July 2011.Following the Governing Council’s opinion and the adoption of an opinion of the European Parliament, the new President will be appointed by the

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Mario Draghi, Luis de Guindos: Introductory statement to the press conference (with Q&A)

July 25, 2019

Mario Draghi, President of the ECB,Luis de Guindos, Vice-President of the ECB,Frankfurt am Main, 25 July 2019INTRODUCTORY STATEMENTJump to the transcript of the questions and answersLadies and gentlemen, the Vice-President and I are very pleased to welcome you to our press conference. We will now report on the outcome of today’s meeting of the Governing Council, which was also attended by the Commission Vice-President, Mr Dombrovskis.Based on our regular economic and monetary analyses, we decided to keep the key ECB interest rates unchanged. We expect them to remain at their present or lower levels at least through the first half of 2020, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to our aim over the medium term. We intend to

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Monetary policy decisions

July 25, 2019

PRESS RELEASE25 July 2019At today’s meeting the Governing Council of the European Central Bank (ECB) decided that the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council expects the key ECB interest rates to remain at their present or lower levels at least through the first half of 2020, and in any case for as long as necessary to ensure the continued sustained convergence of inflation to its aim over the medium term.The Governing Council intends to continue reinvesting, in full, the principal payments from maturing securities purchased under the asset purchase programme for an extended period of time past the date when it

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