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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: Interview with RTÉ (Ireland’s National Television and Radio Broadcaster)

3 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Robert Shortt on 13 February 2020 and broadcast (in part) on 13 February 202014 February 2020There has been some criticism of ECB policy when it comes to quantitative easing and negative interest rates. Some people have described it as an experiment in monetary policy. There’s been this assertion that interest rates are no longer an effective tool for stimulating economic activity. People have painted the scenario of the Japanification of the eurozone economy. What’s your response to all of that?We don’t agree with that analysis. If you go back to 2014, which is when this policy started, since then ECB monetary policy has been very effective. We have seen very low interest rates for firms and

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ECB publishes Consolidated Banking Data for end-September 2019

5 days ago

PRESS RELEASE12 February 2020Chart 1Total assets of credit institutions headquartered in the euro area and in the EU(EUR billions)Chart 2Non-performing loans ratio of credit institutions headquartered in the euro area and in the EU(percentages)The European Central Bank (ECB) has published the Consolidated Banking Data (CBD) with reference to end-September 2019, a dataset 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-September 2019 data refer to 380 banking groups and 2,777 stand-alone credit institutions operating in the EU (including foreign subsidiaries and branches),

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Isabel Schnabel: Narratives about the ECB’s monetary policy – reality or fiction?

6 days ago

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Juristische Studiengesellschaft Karlsruhe, 11 February 2020In recent years, Germany has experienced one of the longest economic upswings since the Second World War.[1] Since 2010 the German economy has grown at an average annual rate of 2%. Unemployment has fallen to its lowest level since German reunification.The monetary policy of the ECB has contributed significantly to that expansion. By lowering interest rates and making use of new monetary policy instruments, the ECB has created financing conditions that support investment, growth and job creation across the euro area. And it was the ECB’s decisive action in 2012 that prevented a break-up of the euro area.Despite these considerable successes, the public

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Philip R. Lane: Low inflation: macroeconomic risks and the monetary policy stance

6 days ago

SPEECHKeynote speech by Philip R. Lane, Member of the Executive Board of the ECB, at the financial markets workshop of the Economic Council (Finanzmarktklausur des Wirtschaftsrats der CDU)Berlin, 11 February 2020In the period between the end of the Bretton Woods system in the early 1970s and the global financial crisis in 2008, the main challenge for central banks was to tackle excessively-high inflation and guard against its resurgence by counteracting pro-inflationary shocks.[1] More recently, anti-inflationary shocks have dominated and addressing excessively-low inflation poses new challenges. In my remarks today, I therefore plan to focus on the conduct of monetary policy when inflation is below target and explain why the ECB is maintaining an accommodative monetary policy stance. I

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Christine Lagarde: Debate about the Annual Report

6 days ago

SPEECHIntroductory statement by Christine Lagarde, President of the ECB, on the occasion of the presentation of the ECB Annual Report 2018 at the European ParliamentStrasbourg, 11 February 2020Mr President of the European Parliament,Mr Executive Vice-President of the Commission,Honourable Members of the European Parliament,It gives me great pleasure to participate for the first time in a plenary session and to discuss your draft resolution on the ECB’s Annual Report for 2018.Independence and accountability are two sides of the same coin for the ECB: one cannot exist without the other. This is why the ECB’s relationship with the European Parliament is so important. The ECB’s Annual Report is a central element of this relationship, and Parliament’s resolution and the subsequent feedback we

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Isabel Schnabel: Interview with Die Welt

6 days ago

INTERVIEWInterview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Anja Ettel and Holger Zschäpitz on 10 February 2020, published on 11 February 202011 February 2020You want to clear up misunderstandings about the ECB. Would you say that you are now on a type of peacekeeping mission to mediate between the central bank and the German public? No, that is not what this is about. I am not a mediator between two parties; I am now a member of the ECB’s Executive Board. But in my new role as a board member I am committed to seeking greater public understanding and clearing up misunderstandings. For people to constantly hear that the ECB’s policy is harmful to them is misleading and it undermines their trust. This worries me.  Which misunderstanding do you wish to

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

6 days ago

PRESS RELEASE11 February 2020Credit terms broadly unchanged for almost all counterparties Most types of counterparty intensified efforts to negotiate more favourable termsStronger demand for funding across all types of collateral except high-yield corporate bondsRespondents very confident in their ability to act as market-makers in times of stress for all asset classes except high-yield corporate bondsCredit terms offered to counterparties were broadly unchanged between September and November 2019 in both the securities financing market and the OTC derivatives market. Price terms eased, whereas non-price terms tightened. An improvement in liquidity conditions, competitive pressure and greater availability of balance sheet capacity were the main drivers underlying the easing of price terms.

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Luis de Guindos: Entrevista con Expansión

7 days ago

ENTREVISTAEntrevista con Luis de Guindos, vicepresidente del BCE, realizada por Andrés Stumpf el 6 de febrero y publicada el 10 de febrero 202010 de febrero 2020El BCE lleva años pidiendo ayuda a los Estados en forma de política fiscal expansiva. ¿Cree que es posible?El entramado fiscal que existe ahora mismo en Europa presenta deficiencias. La política fiscal está descentralizada y hay un pacto de estabilidad del crecimiento que limita al 3% el déficit y al 60% el nivel de deuda sobre PIB. Yo creo que es un marco ineficiente para desarrollar una política fiscal que actúe de forma anticíclica en la zona euro. El BCE insiste en que aquellos países con espacio fiscal deben aprovecharlo y actuar. Pero, a menudo, aquellos que tienen espacio fiscal no tienen voluntad política y los que tienen

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ECB seeks feedback on amendments to the Regulation on monetary financial institution balance sheet statistics

7 days ago

PRESS RELEASE10 February 2020ECB launches a public consultation ECB asks for feedback by 13 March 2020The European Central Bank (ECB) is launching a public consultation on a draft Regulation amending the Regulation on monetary financial institution (MFI) balance sheet statistics. The Regulation has been reviewed with the aim of keeping the ECB’s statistics fit for purpose. The review also takes into account an assessment of the relative merits of new requirements against the potential costs to reporting agents.The principal purpose of MFI balance sheet statistics is to provide policy-makers with a comprehensive and timely picture of monetary developments in the euro area, including the headline series on money and credit presented in the press releases on monetary developments in the euro

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Luis de Guindos: Interview with Expansión

7 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Andrés Stumpf on 6 February 2020 and published on 10 February 202010 February 2020For years the ECB has been asking for help from Member States in the form of expansionary fiscal policy. Do you think it’s possible?The fiscal framework in Europe right now has its shortcomings. Fiscal policy is decentralised and there is a Stability and Growth Pact that limits the deficit to 3% of GDP and debt levels to 60% of GDP. In my opinion, it isn’t an effective framework for developing a countercyclical fiscal policy in the euro area. The ECB stresses that countries with fiscal space should use it to their advantage and take action. However, it’s often the case that countries with fiscal space don’t have the political

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Luis de Guindos: The euro area financial sector: opportunities and challenges

11 days ago

SPEECHSpeech by Luis de Guindos, Vice-President of the ECB, at the XXVI Santander Iberian ConferenceMadrid, 6 February 2020It is a pleasure to be here today and share my thoughts – and some policy considerations – on the opportunities and challenges facing euro area financial institutions in the current environment. Opportunities and challenges for euro area banks The profitability of euro area banks has been lacklustre for several years. Their weak profitability can not only be attributed to the weak macro-financial environment but, more importantly, to structural factors. Significant banks’ return on equity was less than 6% in the 12 months to September 2019, falling short of their cost of capital, which is estimated at around 8% to 10% for the majority of banks.[1] Euro area banks’

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Christine Lagarde: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament

11 days ago

SPEECHIntroductory statement by Christine Lagarde, President of the ECB, at the ECON committee of the European ParliamentBrussels, 6 February 2020Madam Chair,Honourable members of the Economic and Monetary Affairs Committee,Ladies and gentlemen,I am very happy to appear before this Committee shortly after the first Governing Council meeting of 2020, during which the ECB decided to launch a review of its monetary policy strategy. More than 16 years have passed since the ECB last reviewed its strategy. And as we discussed in December, since 2003 the world economy has undergone profound structural changes that have transformed the environment in which monetary policy operates.More specifically, declining trend growth on the back of slowing productivity growth and an ageing population, and the

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Christine Lagarde: Remarks on the occasion of receiving the Grand Prix de l’Économie 2019 from Les Echos

12 days ago

SPEECHSpeech by Christine Lagarde, President of the ECB, at the "Grand Prix de l’Économie des Echos pour l’année 2019"Paris, 5 February 2020It’s a great honour to be awarded this prize, and to receive it in the presence of so many leading figures from the French business community. The environment facing European business today is characterised by both uncertainty in the short term and a changing landscape in the longer term.The short-term uncertainties are mainly related to global risks – trade, geopolitical and now the outbreak of the coronavirus and its potential effect on global growth.Over the last two years, the euro area economy has been quite resilient to global shocks, with our accommodative monetary policy supporting employment and consumption.And, though GDP growth in the last

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Luis de Guindos: Interview with ERT TV (Hellenic Broadcasting Corporation)

14 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Rallou Alexopoulou on 3 February 2020 and broadcast (in part) on 3 February 20203 February 2020The asset purchase programme (APP) was restarted in November 2019, with no specific expiry date. Greece is currently not eligible to participate in the programme. However, Fitch upgraded Greece’s credit rating to BB on 24 January and the outlook is positive. Do you think Greece could catch up and benefit from the APP if it becomes eligible in the course of this year or the next? I think the situation is quite clear. The evolution of the Greek economy is positive and I think this is what has been reflected in the upgrades by the rating agencies. So, once Greek bonds reach investment grade, which I hope will be sooner

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Philip R. Lane: Interview with Financial Times

15 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Martin Arnold on 27 January, and published on 2 February 20202 February 2020The key motivation for this interview was to look at inflation and monetary policy, and to ask you to try and explain why inflationary pressures seem so low, and why – even though in the past five years the ECB has thrown pretty much the full monetary policy toolkit at trying to raise inflation – it still hasn’t hit its target. It’s still struggling to push inflation up. What’s driving that? When you listen to economists and you read what people are saying about it, you get multiple explanations. Why do you think that is and what can you do about it?First and foremost, there has been a big macro shock that has seen the

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ECB’s subscribed capital to remain steady after Bank of England leaves the European System of Central Banks

18 days ago

PRESS RELEASE30 January 2020Total subscribed capital of the ECB to remain at €10.8 billionECB to repay Bank of England’s share in its paid-up capital (€58 million)Bank of England’s share in ECB’s subscribed capital to be reallocated among remaining national central banks The European Central Bank (ECB) will keep its subscribed capital steady at €10.8 billion after the Bank of England leaves the European System of Central Banks (ESCB). The current share of the Bank of England in the ECB’s subscribed capital, which stands at 14.3%, will be reallocated among both the euro area national central banks (NCBs) and the remaining non-euro area NCBs. The Bank of England is due to withdraw from the ESCB as a consequence of the United Kingdom’s exit from the European Union. It holds 14.3% of the ECB’s

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ECB welcomes ratification of agreement on orderly UK withdrawal from European Union

18 days ago

PRESS RELEASE30 January 2020ECB regrets United Kingdom leaving European UnionCentral bank prepared for all contingencies, and monitoring financial market developmentsBanks now need to press ahead with implementation of Brexit plansThe European Central Bank (ECB) expressed regret that the United Kingdom is leaving the European Union. However, the ECB welcomes the ratification of the agreement on an orderly UK withdrawal. In recent months and years, the ECB has taken steps to prepare for all contingencies and it will continue to closely monitor developments in financial markets to preserve stability. The ECB stresses that banks now need to press ahead with the implementation of their Brexit plans in accordance with agreed timelines.The ECB’s President, Christine Lagarde, said: “It is with

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ECB appoints Roland Straub as Counsellor to the President

20 days ago

PRESS RELEASE28 January 2020Roland Straub confirmed in position as Counsellor to the President and Co-ordinator of the Counsel to the Executive Board Appointment effective as of 1 February 2020The Executive Board of the European Central Bank (ECB) has appointed Roland Straub as Counsellor to the President and Co-ordinator of the Counsel to the Executive Board for a further three years. Mr Straub was appointed as Counsellor to the previous President on 1 February 2017. Mr Straub, 45, has been with the ECB for 13 years. Before becoming Counsellor to the President, Mr Straub served as Counsellor to former Executive Board member Benoît Cœuré. Before this, he worked in the Directorates General Research and International & European Relations. Mr Straub previously worked at the International

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Yves Mersch: Asset price inflation and monetary policy

21 days ago

Keynote speech by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the celebration of INVESTAS’ 60th anniversaryLuxembourg, 27 January 2020IntroductionThe outlook for euro area economic activity and inflation at present warrants the highly accommodative monetary policy implemented by the ECB through our package of policy measures. Nonetheless, the Governing Council remains attentive to the potential side effects of those measures. Monitoring and analysing those side effects is part and parcel of the Governing Council’s ongoing monetary policy assessment and our recently announced strategy review.Indeed, the prolonged period of substantial accommodation and the unconventional nature of our measures call for vigilance on the

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Christine Lagarde: Entretien avec France 2

24 days ago

ENTRETIENEntretien de Christine Lagarde, Présidente de la BCE, accordé à Jean-Paul Chapel24 January 2020Christine Lagarde, bonjour. C’est votre première interview télé en France depuis que vous avez pris vos nouvelles fonctions à la Banque centrale européenne, en novembre. Alors, merci de la réserver à France 2 et Télématin. Les Français vous ont connue comme ministre de l’Économie, puis directrice du FMI, le Fonds monétaire international. Là, à la BCE, c’est un poste avec encore plus de pouvoir, chacune de vos paroles est scrutée par les marchés financiers, vous devez peser chaque mot ?Il faut que la parole soit suffisamment rare pour rester solide et crédible, et il faut évidemment qu’un banquier central fasse attention aux signaux qu’il donne, parce que c’est effectivement observé par

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Results of the Q1 2020 ECB Survey of Professional Forecasters

24 days ago

PRESS RELEASE24 January 2020Expectations for euro area inflation, growth and unemployment broadly unchangedRespondents to the ECB Survey of Professional Forecasters (SPF) for the first quarter of 2020 reported point forecasts for annual HICP inflation averaging 1.2%, 1.4% and 1.5% for 2020, 2021 and 2022, respectively. For 2020 and 2021, which were also surveyed in the previous (Q4 2019) survey round, these results represent no change. Average longer-term inflation expectations (which, like all other longer-term expectations in this round of the SPF, refer to 2024) remained at 1.7%.SPF respondents’ expectations for growth in euro area real GDP averaged 1.1%, 1.2% and 1.4% for 2020, 2021 and 2022, respectively. This represents small revisions from the previous round of 0.1 percentage point

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Christine Lagarde: Interview with Bloomberg TV

24 days ago

Interview with Christine Lagarde, President of the ECB, conducted by Francine Lacqua and broadcast on 24 January24 January 2020 We are delighted to be joined right here on Bloomberg by the European Central Bank President. She’s Christine Lagarde. Madame Lagarde, thank you so much for giving us a little bit of your busy schedule. When you look at the strategy review event, you really laid out what you were trying to achieve yesterday in the press conference. At this moment, what do you see as the biggest challenge for it?The biggest challenge is going to be to harness all the views, all the assessments, all the convictions into a direction that will actually serve the purpose that we have been assigned, which is guaranteed price stability in the economy. Now, that seems like a very dry

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Euro banknote counterfeiting remained low in the second half of 2019

24 days ago

PRESS RELEASE24 January 2020308,000 counterfeit euro banknotes were withdrawn from circulation in the second half of 2019 Over 70% 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 308,000 counterfeit euro banknotes were withdrawn from circulation in the second half of 2019, an increase of 22.7% when compared with the first half of 2019 and 17.6% more than in the second 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 (see the

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Christine Lagarde: Interview with France 2

24 days ago

INTERVIEWInterview with Christine Lagarde, President of the ECB, conducted by Jean-Paul Chapel24 January 2020Good morning, Christine Lagarde. This is your first television interview in France since taking up your new position at the European Central Bank in November. Thank you for giving it to France 2 and Télématin. French people knew you as the Minister of Economy and then as Managing Director of the International Monetary Fund (IMF). And now, as head of the ECB, you have an even more powerful role and the financial markets scrutinise everything you say. Do you have to weigh every word? You have to speak sparingly enough for your message to remain solid and credible. And central bankers obviously have to be careful in sending out signals because financial markets and analysts are

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Christine Lagarde: How can a united Europe meet the challenges it faces today?

25 days ago

SPEECHOpening remarks by Christine Lagarde, President of the ECB, during a dinner on "Uniting Europe" at the World Economic ForumDavos, 23 January 2020This year marks the 70th anniversary of the Schuman declaration, which first put forward the idea of a single authority to govern the production of coal and steel in Europe. Robert Schuman’s method for building Europe was clear: “Europe will not be made all at once”, he said, but “through concrete achievements which first create a de facto solidarity”. His idea was that, by taking deliberate policy steps to become interdependent – like sharing raw materials – European countries would become inseparable. And indeed they have. We have become both safer and richer. The formation of the Single Market gives every EU citizen average welfare gains

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ECB launches review of its monetary policy strategy

25 days ago

PRESS RELEASE23 January 2020Review will encompass quantitative formulation of price stability, monetary policy toolkit, economic and monetary analyses and communication practicesOther considerations, such as financial stability, employment and environmental sustainability, will also be part of review Expected to be concluded by end of 2020Review will be based on thorough analysis and open minds, engaging with all stakeholdersThe Governing Council of the European Central Bank (ECB) today launched a review of its monetary policy strategy. The monetary policy strategy was adopted in 1998 and some of its elements were clarified in 2003. Since 2003 the euro area and the world economy have been undergoing profound structural changes. Declining trend growth, on the back of slowing productivity

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Central bank group to assess potential cases for central bank digital currencies

27 days ago

PRESS RELEASE21 January 2020The Bank of Canada, the Bank of England, the Bank of Japan, the European Central Bank, the Sveriges Riksbank and the Swiss National Bank, together with the Bank for International Settlements (BIS), have created a group to share experiences as they assess the potential cases for central bank digital currency (CBDC) in their home jurisdictions.The group will assess CBDC use cases; economic, functional and technical design choices, including cross-border interoperability; and the sharing of knowledge on emerging technologies. It will closely coordinate with the relevant institutions and forums – in particular, the Financial Stability Board and the Committee on Payments and Market Infrastructures (CPMI). The group will be co-chaired by Benoît Cœuré, Head of the BIS

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January 2020 euro area bank lending survey

27 days ago

PRESS RELEASE21 January 2020Credit standards remained broadly unchanged for both loans to enterprises and housing loansDemand for loans to enterprises declined, while demand for housing loans increased furtherEuro area banks use TLTRO-III liquidity largely for granting loansCredit standards – i.e. banks’ internal guidelines or loan approval criteria – remained broadly unchanged for both loans to enterprises and loans to households for house purchase in the fourth quarter of 2019, according to the January 2020 bank lending survey (BLS), in line with expectations expressed in the previous survey round. Credit standards for consumer credit and other lending to households tightened further, despite expectations that they would remain broadly unchanged. Risk perceptions (relating to both the

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Christine Lagarde: Frankfurt and Europe in a new decade

January 16, 2020

Speech by Christine Lagarde, President of the ECB, at the New Year’s Reception of the City of Frankfurt, 16 January 2020First of all, let me start by wishing you all a happy New Year!It really is a great pleasure to be part of this Neujahrsempfang and to welcome in the New Year with all of you, my new neighbours in my new home. You might be disappointed – or perhaps relieved – to learn that I won’t be talking about monetary policy this evening. We’re in the quiet period ahead of our Governing Council meeting next week where members do not discuss policy issues.Frankfurt as a European cityThe character of every community is shaped by two choices we make: how we organise ourselves internally and how we relate to others externally. That’s true of companies and institutions, and it’s true of

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