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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 on Twitter

3 days ago

INTERVIEWInterview on Twitter with Philip R. Lane, Member of the Executive Board of the ECB, conducted and published on 24 September 202024 September 2020Good afternoon, this is Philip R. Lane, the @ecb’s Chief Economist. I’m looking forward to answering your questions for the next 45 minutes or so. Join the conversation! #AskECBWhere do you expect world economy is heading by the end of this year and what the prospectus of 2021. Specially England and Indian economy?Lane: The global economy was badly hit in the first half of 2020 by the pandemic, no doubt. While there has been some recovery since then, our latest ECB staff projections show that global real GDP will only be back at pre-crisis levels by 2022 https://ecb.europa.eu/pub/pdf/other/ecb.projections202009_ecbstaff~0940bca288.en.pdf

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Yves Mersch: Interview with Bloomberg

4 days ago

INTERVIEWInterview with Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Paul Gordon and Carolynn Look23 September 2020The latest ECB forecasts weren’t much changed, some of the data is good, some of it not so good. What’s your view of the outlook at the moment?I must say that since the last time we took action, the least one could say is that things in the economy have not gone for the worse. And even with sometimes conflicting incoming information, most of it has led us to say that the risk balance may still be somewhat to the downside but less so than it has been, and that led us to no change because we said we are broadly in line with our baseline.Looking also at new incoming information I think nothing is pointing

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Fabio Panetta: Asymmetric risks, asymmetric reaction: monetary policy in the pandemic

5 days ago

SPEECHSpeech by Fabio Panetta, Member of the Executive Board of the ECB, at the meeting of the ECB Money Market Contact GroupFrankfurt am Main, 22 September 2020It is a pleasure to speak to the Money Market Contact Group today.Money markets and central banks have an important relationship which, when it is working well, makes monetary policy more effective. Money market prices reflect expectations of our policy and the understanding of our reaction function. They are the first stage in the transmission of our policies to financing conditions for the real economy. So I am pleased to talk to you today about how I see current issues related to monetary policy – and to hear your views in return. The ECB’s policy response to the coronavirus (COVID-19) crisisIn pursuing our price stability

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ECB to accept sustainability-linked bonds as collateral

5 days ago

PRESS RELEASE22 September 2020Bonds with coupons linked to sustainability performance targets to become eligible as central bank collateral Potential eligibility also for asset purchases under the APP and the PEPP subject to compliance with programme-specific eligibility criteriaDecision applicable from 1 January 2021The European Central Bank (ECB) has decided that bonds with coupon structures linked to certain sustainability performance targets will become eligible as collateral for Eurosystem credit operations and also for Eurosystem outright purchases for monetary policy purposes, provided they comply with all other eligibility criteria. The coupons must be linked to a performance target referring to one or more of the environmental objectives set out in the EU Taxonomy Regulation

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Christine Lagarde: Jointly shaping Europe’s tomorrow

6 days ago

SPEECH Introductory remarks by Christine Lagarde, President of the ECB, at the Franco-German Parliamentary Assembly, 21 September 2020Frankfurt am Main, 21 September 2020Dear President Schäuble, Dear President Ferrand,Honourable Members of the Franco-German Assembly, I would like to thank you very warmly for inviting me to join you today.As President of the European Central Bank and a French citizen living and working in Germany, it is an honour to speak at this historic forum. This parliamentary assembly is an embodiment of the special relationship between our two countries and their commitment to European integration. I find it essential that the ECB constantly engages in two-way communication, especially with citizens’ representatives. We need to make sure that the ECB’s voice is heard

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ECB proposes to reduce reporting burden for banks and increase data quality

6 days ago

PRESS RELEASE21 September 2020Smarter and standardised reporting procedures proposed to reduce banks’ reporting costsBanking industry involvement in improving procedures neededThe European Central Bank (ECB) today published the European System of Central Banks’ (ESCB) input into a European Banking Authority (EBA) feasibility report on reducing the reporting burden for the European banking industry. Under Article 430c of the Capital Requirements Regulation (CRR), the European Parliament and the Council of the European Union mandated the EBA to carry out a feasibility study and requested that input from the ESCB be taken into account.The ESCB report proposes to reduce the reporting burden for banks in the fields of statistical, resolution and prudential reporting without losing the

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Luis de Guindos: Interview with La Razón

7 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Jesús Rivasés on 14 September 2020 20 September 2020Are we already living in a new economic world?At the moment we are suffering the effects of a pandemic. The world was not ready for the type of lockdown that occurred in the vast majority of economies, and the fallout has been severe: the GDP contraction has been unprecedented and the way we do many things has changed. The hope is that, as the pandemic subsides, we return to some sort of normality. There are structural factors that may change, such as our global value chains. From now on, more importance on proximity, not just profitability and cost efficiency, may be placed. The pandemic will also result in more debt, both public and private. These are

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Christine Lagarde: Interview with Challenges

9 days ago

INTERVIEWInterview with Christine Lagarde, President of the ECB, conducted by Jean-Pierre de La Rocque18 September 2020When you spoke at the Council on Foreign Relations in December 2018, you stated that gender parity in the workplace is a “revolutionary process” that must be achieved through the use of incentives, such as corporate or government quotas. Do you think that this “revolutionary” process is now a reality in most of the major institutions, businesses and governments? There is a certain level of awareness now, but we’re only just getting started. Gender inequality still exists in terms of access to the job market and the pay gap. In OECD countries, the gender wage gap is still 13%. Women are working more and more but are still under-represented in management positions in both

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Isabel Schnabel: Unequal scars – distributional consequences of the pandemic

9 days ago

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the panel discussion “Verteilung der Lasten der Pandemie” (“Sharing the burden of the pandemic”), Deutscher Juristentag 2020Frankfurt am Main, 18 September 2020The coronavirus (COVD-19) pandemic is the most severe crisis in post-war history.[1] It threatens the health of the population, poses enormous challenges to the healthcare system and is causing significant economic costs. Within a short period of time, wide-ranging government support measures were introduced in an attempt to cushion some of the direct consequences of the crisis. In light of the enormous economic costs of the pandemic and the measures taken thus far, questions have been raised about how the economic burden of the crisis will be financed and

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ECB’s Governing Council says that exceptional circumstances justify leverage ratio relief

10 days ago

PRESS RELEASE17 September 2020ECB’s Governing Council confirms exceptional circumstances Opinion instrumental in ECB Banking Supervision’s decision to allow banks to exclude central bank exposures from leverage ratio See also ECB Banking Supervision announcement on leverage ratioThe Governing Council of the European Central Bank (ECB) has decided that it concurs with ECB Banking supervision that there are ‘exceptional circumstances’ allowing the temporary exclusion of certain central bank exposures from the leverage ratio.The Governing Council said in an opinion: “The situation brought about by the coronavirus (COVID-19) pandemic has affected all euro area economies in an unprecedented and profound way. This situation has resulted in an ongoing need for a high degree of monetary policy

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Isabel Schnabel: Interview with Agence France-Presse (AFP)

11 days ago

INTERVIEWInterview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Jean-Philippe Lacour16 September 2020While the current rise of the euro is recognised as an element that can reduce inflation, the ECB claims there must be “no complacency” when it comes to reaching the objective of price stability. Will a verbal intervention be enough to prevent the euro from continuing to rise?We are not targeting the exchange rate. We adjust our policies according to the medium-term inflation outlook. And at the last Governing Council meeting there was still an exceptionally high level of uncertainty. As President Lagarde explained at the press conference, it was the Governing Council’s view that more information was needed on how the pandemic evolves, how our measures

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Fabio Panetta: Healing after the pandemic: supporting and sustaining the recovery

12 days ago

SPEECHSpeech by Fabio Panetta, Member of the Executive Board of the ECB, at the 24th Economist Roundtable with the Government of Greece15 September 2020Thank you for inviting me today to discuss the response to the coronavirus (COVID-19) crisis, with a particular focus on Greece.The pandemic has caused significant disruption and hardship in nearly every aspect of our lives, and it will take time to heal the damage that has been done. The euro area economy has been severely hit. Today I will argue that while Europe has responded to a major challenge, it is not out of the woods yet. In Greece, European and domestic policies have together played a crucial role in absorbing the shock, but further efforts will be needed. At the same time and as Hippocrates, the father of medicine, once said:

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Christine Lagarde: Remarks at the Annual Meeting of the Council of Governors of the Arab Central Banks and Monetary Authorities

14 days ago

SPEECHContribution by Christine Lagarde, President of the ECB, during the session “Economic, financial and monetary impact of COVID-19 pandemic, and post-crisis options for policies and tools” Frankfurt am Main, 13 September 2020The global economy underwent a deep and synchronised contraction in the second quarter of this year that was unprecedented in both speed and extent – far exceeding the declines witnessed during the global financial crisis. The ECB’s September projections for global growth excluding the euro area are for -3.7% in 2020, 6.2% in 2021 and 3.8% in 2022. Global economic activity has begun to recover since mid-May as various measures put in place to contain the spread of the pandemic were eased. The recovery has been substantial – but it remains uneven, uncertain and

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Yves Mersch: Supervisory action in times of crisis and the limits of the ECB’s prudential mandate

16 days ago

SPEECHIntroductory statement by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the Eurofi Financial Forum in BerlinFrankfurt am Main, 11 September 2020Today, I will reflect on two issues: our role in the extraordinary measures taken to keep economies afloat since the outbreak of the current crisis, and the limits of the ECB’s prudential mandate.The pandemic has dealt an unprecedented peacetime blow to the European economy. In spring, a great number of our businesses went into full lockdown. Crucially, however, banks in the euro area were able to offer vital support. To this end, ECB Banking Supervision provided far-reaching capital and operational relief, making record levels of lending possible during this exceptional time.More

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Isabel Schnabel: The shadow of fiscal dominance: Misconceptions, perceptions and perspectives

16 days ago

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Centre for European Reform and the Eurofi Financial Forum on “Is the current ECB monetary policy doing more harm than good and what are the alternatives?”Berlin, 11 September 2020The euro has been built on the principle of monetary dominance. This means that the European Central Bank (ECB) pursues its monetary policy objectives, as defined by its mandate in the European Treaties, without being constrained by other considerations. This principle was buttressed by granting the ECB statutory independence. The ECB is said to be one of the world’s most independent central banks.At the time of the Maastricht Treaty, high government debt was seen as a major threat to central bank independence, and it was feared that

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

17 days ago

INTRODUCTORY STATEMENTChristine Lagarde, President of the ECB,Luis de Guindos, Vice-President of the ECB,Frankfurt am Main, 10 September 2020Jump 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 Executive Vice-President, Mr Dombrovskis.The incoming data since our last monetary policy meeting in July suggest a strong rebound in activity broadly in line with previous expectations, although the level of activity remains well below the levels prevailing before the coronavirus (COVID-19) pandemic. While activity in the manufacturing sector has continued to improve, momentum in

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Monetary policy decisions

17 days ago

PRESS RELEASE10 September 2020At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:(1) 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 -0.50% respectively. The Governing Council 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) The Governing Council will continue its purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,350 billion.

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Christine Lagarde: Payments in a digital world

17 days ago

SPEECH Speech by Christine Lagarde, President of the ECB, at the Deutsche Bundesbank online conference on banking and payments in the digital worldFrankfurt am Main, 10 September 2020I’m honoured to be speaking this evening at the Deutsche Bundesbank’s conference on banking and payments in the digital world.A little over a century ago, George Bernard Shaw said that “Money is the counter that enables life to be lived socially; it is life as truly as sovereigns and banknotes are money”.So money facilitates transactions and relationships and is an expression of sovereignty. This is just as relevant in today’s fast-moving world.In the digital age, innovation in payments enables us to interact in easier, faster and cheaper ways. But this innovation also comes in new forms – based on private

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Isabel Schnabel: Interview with Reuters

27 days ago

INTERVIEWInterview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Balazs Koranyi and Frank Siebelt on 28 August 2020 and published on 31 August 202031 August 2020Could you please update us on your assessment of economic developments over the summer? We now have the numbers for the second quarter and they showed a decline in GDP of 12.1% (quarter-on-quarter). That’s of course very large, but it’s close to our projection of -13%. If you look at incoming data, by and large they support the baseline of our June projections. It remains the case that uncertainty is exceptionally high. But overall, I believe that we are still close to the baseline. That means we expect a strong rebound in the third quarter, even if that rebound will not be strong enough to put us

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ECB extends euro liquidity lines with two central banks

August 28, 2020

PRESS RELEASE28 August 2020ECB extends euro liquidity lines with the central banks of Croatia and Romania Euro liquidity lines are extended by six months to end of June 2021 The European Central Bank (ECB) and the Hrvatska narodna banka (Croatian National Bank, HNB) as well as the Banca Naţională a României (National Bank of Romania, BNR) have agreed to extend the respective euro liquidity lines by six months until the end of June 2021. The lines were established earlier this year to provide euro liquidity to financial institutions in the two countries via their respective national central banks to address possible euro liquidity needs in the presence of market dysfunctions due to the COVID-19 shock. The euro liquidity lines had been agreed initially until the end of 2020.Through a swap

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ECB publishes consolidated banking data for end-March 2020

August 27, 2020

PRESS RELEASE27 August 2020Chart 1Total assets of credit institutions headquartered in the EU(EUR billions)Data for total assets of EU-headquartered credit institutionsChart 2Non-performing loans ratio of credit institutions headquartered in the EU (excluding the United Kingdom)(EUR billions, percentages)Notes: Non-performing loans ratio is defined as the ratio of non-performing loans to total loans.Data for non-performing loans ratio of EU-headquartered credit institutionsChart 3Return on equity of credit institutions headquartered in the EU in March 2020(percentages)Notes: Return on equity is defined as the ratio of total profit (loss) for the year to total equity. Data show return on equity calculated on the basis of the first three months of 2020. Data do not include branches of credit

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Philip R. Lane: The pandemic emergency: the three challenges for the ECB

August 27, 2020

SPEECHSpeech by Philip R. Lane, Member of the Executive Board of the ECB, at the Jackson Hole Economic Policy Symposium, Federal Reserve Bank of Kansas City “Navigating the Decade Ahead: Implications for Monetary Policy”27 August 2020Today, I will discuss the monetary policy measures taken by the ECB in response to the pandemic shock, take stock of the progress to date and outline the main challenges that lie ahead.[1]The pandemic: the three challenges for the ECBThe nature of the pandemic shock called for an extraordinary policy response. From the outset, there were three challenges for the ECB: (i) to stabilise markets; (ii) to protect credit supply; and (iii) to neutralise the pandemic-related downside risks to the inflation path. Tackling the first pair of challenges is needed in order

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Philip R. Lane: Interview with CNBC

August 27, 2020

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Steve Liesman on 27 August 2020 and broadcast on 27 August 202027 August 2020The eurozone fell a little bit less than the United States in the first quarter, fell a little bit more in the second quarter. I’m talking about GDP. Tell us where you think the eurozone is right now when it comes to recovery and where you think it’s going.What we’ve seen over the summer is more or less in line with our baseline projections. So in our baseline – like everywhere – the second quarter was going to be the worst quarter. By the way, within the second quarter, the worst month would have been April. We’ve had a very big fall in output, but also week by week, the recovery is happening. But let me emphasise that

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Isabel Schnabel: Going negative: the ECB’s experience

August 26, 2020

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Roundtable on Monetary Policy, Low Interest Rates and Risk Taking at the 35th Congress of the European Economic AssociationFrankfurt am Main, 26 August 2020In June 2014, the ECB was the first major central bank to lower one of its key interest rates into negative territory.[1] As experience with negative interest rates was scant, the ECB proceeded cautiously over time, lowering the deposit facility rate (DFR) in small increments of 10 basis points, until it reached -0.5% in September 2019. While negative interest rates have, over time, become a standard instrument in the ECB’s toolkit, they remain controversial, both in central banking circles and academia.[2]In my remarks today, I will review the ECB’s

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Results of the June 2020 survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD)

August 21, 2020

PRESS RELEASE21 August 2020Most widespread tightening of credit terms over three-month review period since SESFOD launched in 2013Less-favourable price terms for non-financial corporations and less-favourable non-price terms for hedge fundsLiquidity and trading deteriorated materially for all types of OTC derivatives, while initial margin requirements increased for almost all typesSome insurance companies, hedge funds and investment funds faced strained liquidity situations linked to variation marginsSurvey respondents reported the most widespread tightening of credit terms and conditions over a three-month review period since the SESFOD was launched in 2013. For the March 2020 to May 2020 review period, their respective institutions offered less-favourable price and non-price credit terms

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Meeting of 15-16 July 2020

August 20, 2020

Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 15-16 July 20201. Review of financial, economic and monetary developments and policy optionsFinancial market developmentsMs Schnabel reviewed the financial market developments since the Governing Council’s previous monetary policy meeting on 3-4 June 2020.In both advanced and emerging market economies, financial conditions were approaching pre-pandemic levels at a slowing but steady pace, as also reflected in the strong recovery in global stock markets. In the euro area sovereign bond markets, pre-pandemic funding conditions had by and large been restored. Market-based measures of inflation expectations had also recovered further, albeit from

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Reduction in frequency of 7-day US dollar liquidity-providing operations as of 1 September 2020

August 20, 2020

PRESS RELEASE20 August 2020ECB and other major central banks to reduce frequency of 7-day US dollar operations from three times per week to once per week, while 84-day operations continue to be offered weekly New frequency effective as of 1 September 2020, to remain in place for as long as appropriate to support smooth functioning of US dollar funding marketsECB and other major central banks standing ready to re-adjust provision of US dollar liquidity as warranted by market conditions In view of continuing improvements in US dollar funding conditions and the low demand at recent 7-day maturity US dollar liquidity-providing operations, the Bank of England, the Bank of Japan, the European Central Bank and the Swiss National Bank, in consultation with the Federal Reserve, have jointly decided

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ECB and Central Bank of the Republic of San Marino set up repo line to provide euro liquidity

August 18, 2020

PRESS RELEASE18 August 2020ECB and Central Bank of the Republic of San Marino set up repo line Repo line to remain in place until June 2021, unless an extension is decidedSize of repo line set at €100 millionThe European Central Bank (ECB) and Banca Centrale della Repubblica di San Marino (the Central Bank of the Republic of San Marino) have agreed to set up a repo line arrangement to provide euro liquidity to financial institutions in the Republic of San Marino to address possible euro liquidity needs in the presence of market dysfunctions due to the COVID-19 shock. Under a repo line, the ECB provides euro liquidity to a non-euro area central bank in exchange for adequate euro-denominated collateral. Under the repo line, the Central Bank of the Republic of San Marino will be able to

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ECB and National Bank of the Republic of North Macedonia set up repo line to provide euro liquidity

August 18, 2020

PRESS RELEASE18 August 2020ECB and National Bank of the Republic of North Macedonia set up repo lineRepo line to remain in place until June 2021, unless an extension is decidedSize of repo line set at €400 millionThe European Central Bank (ECB) and Народна банка на Република Северна Македонија (National Bank of the Republic of North Macedonia) have agreed to set up a repo line arrangement to provide euro liquidity to the Republic of North Macedonia’s financial institutions through the central bank to address possible euro liquidity needs in the presence of market dysfunctions due to the COVID-19 shock.Under a repo line, the ECB provides euro liquidity to a non-euro area central bank in exchange for adequate euro-denominated collateral.Under the repo line, the National Bank of the Republic

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Christine Lagarde: Interview with Le Courrier Cauchois

July 31, 2020

INTERVIEWInterview with Christine Lagarde, conducted by Dominique Lecoq and Marc Aubault on 29 July and published on 31 July 31 July 2020How has the coronavirus (COVID-19) crisis affected you personally? And where have you been? In Frankfurt? In Paris? Or in Normandy?I was based in Frankfurt, of course, and have spent most of this period in lockdown. I was in Frankfurt for eight weeks straight. At that time, all of the bank’s staff were asked to telework, and I have been teleworking, too. We’ve organised most meetings, including Governing Council meetings, via teleworking. To give you an example, the €750 billion plan was decided on 18 March 2020… at my kitchen table! People picture large boardrooms with men in suits, but that’s not how it is…We’ve explored every technological avenue to

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