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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 Les Echos

2 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Guillaume Benoit, Elsa Conesa and Sophie Rolland22 November 2020The European economy is facing further lockdowns. What are the immediate and long-term consequences and do you think there is a risk of another recession?Our focus is more on the spread of the virus, which is inevitably holding back the behaviour of consumers, and not just on the lockdown measures themselves. However, if you put those two factors together, absolutely, we do think they will lead to a drop in activity. The question is how long this period will last and that will depend on the behavioural response and the degree to which the measures are respected. Compared to the lockdown in spring, these measures are less harsh.

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Interview with Börsen-Zeitung

3 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 Kai Johannsen and published on 21 November 2020 21 November 2020Mr Mersch, is it part of the European Central Bank’s mandate to engage with the capital market segment of green and sustainable finance?The EU Treaties require the ECB to give primacy to the objective of price stability. If ECB’s engagement with the green and sustainable financial sector were necessary for maintaining price stability in the euro area, it would fall within the remit of our primary objective. I don’t think that applies at present. In addition, the ECB has what are known as secondary objectives. Without prejudice to our primary objective of price stability, we support the

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

4 days ago

November 202020 November 2020Market operationsChanges to the publication of liquidity management dataOn 5 November 2020 the Governing Council adopted several amendments related to the publication of liquidity management data, with the aim of streamlining processes and increasing efficiency. In particular, the Governing Council decided to suspend the publication of the benchmark allotment amount of main refinancing operations (MROs), since it is not needed for the successful implementation of Eurosystem monetary policy under the current operational framework and liquidity conditions. The Governing Council also decided to reduce the publishing frequency of the autonomous factor forecast from twice a week to once a week on MRO announcement days. Furthermore, the Governing Council decided to

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Christine Lagarde: Fostering sustainable growth in Europe

4 days ago

SPEECHKeynote speech by Christine Lagarde, President of the ECB, at the European Banking CongressFrankfurt am Main, 20 November 2020The coronavirus (COVID-19) pandemic has rightly focused minds on the here and now – on saving lives and securing livelihoods. Our immediate priority has been to protect the economy until widespread immunity is achieved.[1] Yet the pandemic also provides the opportunity to reassess how we will organise our economy in the future. Today’s conference, on the topic of “Towards a New Sustainable Growth Model”, comes at just the right moment. By necessity, the pandemic has accelerated our wider and more common use of digital technology. We have adjusted how we work, how we shop and how we pay.Nearly 50% of Europeans say they have worked from home during the pandemic.

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Isabel Schnabel: COVID-19 and the liquidity crisis of non-banks: lessons for the future

5 days ago

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, Financial Stability Conference on “Stress, Contagion, and Transmission” organised by the Federal Reserve Bank of Cleveland and the Office of Financial ResearchFrankfurt am Main, 19 November 2020The reforms that followed the global financial crisis of 2008 have made our financial system safer and more resilient. Tighter regulation and higher capital ratios have been key factors enabling banks to act as shock absorbers rather than shock amplifiers during the coronavirus (COVID-19) pandemic.At the same time, the crisis has been a stark reminder that there are still considerable vulnerabilities in the financial sector. In particular, there has been a divergence between the comparatively lean regulation of the non-bank

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

5 days ago

SPEECHIntroductory statement by Christine Lagarde, President of the ECB, at the ECON Committee of the European Parliament (by videoconference)Frankfurt am Main, 19 November 2020Madam Chair,Honourable members of the Economic and Monetary Affairs Committee,Ladies and gentlemen,Thank you very much for giving me the opportunity to speak to you today as part of our regular hearings. We continue to be confronted with serious circumstances, from both a health and an economic perspective. Pandemics are highly infrequent and unpredictable events, and consequently the economic outlook is characterised by high uncertainty. The key challenge for policymakers will be to bridge the gap until vaccination is well advanced and the recovery can build its own momentum. In this situation, it is pivotal that

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Philip R. Lane: Transcript of interview with Portuguese public broadcaster RTP3

7 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Maria Nobre, broadcast on Tuesday, 17 November at 12:00 a.m. CET17 November 2020How do you think Portugal is doing during this crisis?We know the global crisis. We know the European crisis and we know that of course those economies which are service-based, those economies which are big producers of tourism, of course are going to be harder hit than those economies which are maybe more manufacturing-based, less dependent on what we call high-contact sectors such as tourism, recreation and entertainment.So in that context, Portugal of course is very much a part of the wider European experience. Some countries have suffered less than others, but from an ECB perspective, the bigger picture is, it’s a

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Christine Lagarde: Interview with The New York Times

7 days ago

INTERVIEWInterview with Christine Lagarde, President of the ECB, conducted by Alison Smale and Jack Ewing on 10 November 202017 November 2020One of your priorities at the European Central Bank is putting together a plan to take on climate change. Do women bring a different set of perceptions to combating the damage it is causing?I actually think so. I think women bring various powers to the table. One is the power of the purse, because I think that in many, many instances women are the decision makers when it comes to consuming. Second, I think they bring the power of life. I think that actually giving birth gives you a sense of prosperity, heritage, transmission, that is quite special.Can you elaborate?I know it’s going to be controversial but I think maternity is center to making sure

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Isabel Schnabel: Interview with CNBC

7 days ago

INTERVIEWInterview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Annette Weisbach, CNBC, on 12 November and aired on 13 November17 November 2020Thank you for talking to us tonight. The virtual Sintra conference is over. What are your main takeaways from the conference?It’s a pleasure to be talking to you today. The ECB Forum is always our big annual event, and we discussed all the big topics that are on the table. Of course, this year the ECB Forum was very much dominated by the pandemic on the one hand and long-term structural trends on the other. And both of those are playing a very important role in our ongoing monetary policy strategy review. So, in a sense, the ECB Forum is also part of our listening events, because we had all these interesting people

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ECB announces independent review of payments system outage

8 days ago

PRESS RELEASE16 November 2020Independent review to be launched on payments infrastructureTARGET2 incident on 23 October 2020 caused outage lasting almost 10 hoursFindings of the review to be published by the second quarter of 2021The European Central Bank (ECB) will launch an independent review of an incident that affected its real-time gross settlement system TARGET2 on 23 October 2020, causing an outage for almost 10 hours. An initial investigation determined that a software defect in a network device was the specific technical cause of the incident. The independent review will also take into account other incidents that affected TARGET Services during 2020, including those affecting directly and indirectly TARGET2 Securities (T2S), the securities settlement platform operated by the

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Luis de Guindos: The euro area financial sector in the pandemic crisis

8 days ago

SPEECH Keynote speech by Luis de Guindos, Vice-President of the ECB, at the 23rd EURO FINANCE WEEK Frankfurt am Main, 16 November 2020
[updated on 16 November 2020 at 10:50 CET]
I am honoured to open the 23rd Euro Finance Week. My remarks today will focus on two main issues. First, I will provide an overview of the current economic situation in the euro area, and focus on how the pandemic has amplified existing vulnerabilities in the financial system. And second, I will highlight the important role that financial regulation and prudential policy have played in response to the pandemic so far, and argue that further policy measures are needed. An uneven recovery across sectors and countries increases the risks of fragmentationThe pandemic crisis has put great pressure on economic

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Luis de Guindos: Banking Union and Capital Markets Union after COVID-19

12 days ago

SPEECH Keynote speech by Luis de Guindos, Vice-President of the ECB, at the CIRSF (Research Centre on Regulation and Supervision of the Financial Sector, Portugal) online Annual International Conference 2020 on Major Trends in Financial RegulationFrankfurt am Main, 12 November 2020It is a great pleasure for me to open this virtual conference on major trends in financial regulation.Where would we be today if we had not improved the governance framework and policy toolkit in the aftermath of the 2008 financial crisis? Imagine if the euro area had to face the coronavirus (COVID-19) pandemic without single banking supervision, common resolution arrangements, higher capital requirements for banks and an organisational framework enabling swift decisions on crucial policy matters.Indeed, we have

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Christine Lagarde: Monetary policy in a pandemic emergency

13 days ago

SPEECHKeynote speech by Christine Lagarde, President of the ECB, at the ECB Forum on Central BankingFrankfurt am Main, 11 November 2020Let me begin by welcoming all of you to this year’s ECB Forum on Central Banking. Regrettably, we cannot be together in Sintra this time, but I trust that this virtual environment will be no less conducive to challenging ideas and productive debate.The purpose of this year’s conference is to examine the challenges facing central banking in a shifting world. We will be discussing many of the long-term trends monetary policy has to contend with, including shifting patterns of globalisation, climate change and a lower natural interest rate. Actually, the largest shift central banks are facing today may well turn out to be the pandemic itself. As John Kenneth

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ECB publishes consolidated banking data for end-June 2020

19 days ago

PRESS RELEASE5 November 2020Chart 1Total assets of credit institutions headquartered in the EU(EUR billions)Data for total assets of credit institutions headquartered in the EUChart 2Non-performing loans ratio of credit institutions headquartered in the EU (excluding the United Kingdom)(EUR billions; percentages)Notes: The non-performing loans ratio is defined as the ratio of non-performing loans to total loans.Data for the non-performing loans ratio of credit institutions headquartered in the EUChart 3Return on equity of credit institutions headquartered in the EU in June 2020(percentages)Notes: Return on equity is defined as the ratio of total profit (loss) for the year to total equity. The data show the return on equity calculated on the basis for the second quarter of 2020. ISO codes

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Isabel Schnabel: Monetary policy in changing conditions

20 days ago

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the second EBI Policy Conference on “Europe and the Covid-19 Crisis – Looking back and looking forward”Frankfurt, 4 November 2020Europe is in the midst of the second wave of the coronavirus (COVID-19) pandemic. Rising infection numbers across the euro area have made new far-reaching containment measures necessary to contain the spread of the virus and protect the most vulnerable members of our society as well as our public health systems.The new measures will again come at significant personal and economic cost. They will slow the path of recovery, increase the risks of long-lasting labour market scarring and ultimately require new fiscal measures to sustain demand and provide relief to those who are least able

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Fabio Panetta: The two sides of the (stable)coin

20 days ago

SPEECHSpeech by Fabio Panetta, Member of the Executive Board of the ECB, at Il Salone dei Pagamenti 2020 Frankfurt am Main, 4 November 2020The payments industry is undergoing a digital transformation, and this transformation is accelerating. We can now pay with cards that are stored in our mobile wallets, ready for a transaction to be initiated at the touch of a button. Mobile payment apps allow us to easily pay or send money to friends. New services based on application programming interfaces, such as payment initiation services, are expanding consumers’ choice of e-commerce payments. Fintechs have sparked the latest wave of innovation. In a recent survey by the European System of Central Banks, over 200 new payment solutions were reported, of which more than one-third were provided by

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Yves Mersch: Q&A at UBS event

20 days ago

TRANSCRIPTTranscript of Q&A session following a fireside chat with Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at an online UBS event on the European economic and policy outlook, conducted on 30 October 20204 November 2020President Lagarde stressed in yesterday’s decision that there had been unanimity in the analysis, and also in the need to take action. But, of course, no action was taken yesterday, and so it wasn’t entirely clear to me what exactly there was unanimity on. And also, given the pre-announcement, isn’t there a risk of raising expectations too much and underwhelming them in the end?There was unanimity insofar as everyone agreed that we are facing high uncertainty. Looking backwards we were quite confident that all

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

20 days ago

PRESS RELEASE4 November 2020Easing of overall credit terms and conditions represented a partial reversal of the tightening recorded in the previous two survey roundsIncrease in pressure, in particular from non-financial corporate counterparties, to obtain more favourable conditions Valuation disputes decreased for both securities financing and derivatives transactionsSurvey respondents reported an easing of credit terms and conditions over the June 2020 to August 2020 review period representing a partial reversal of the widespread tightening of credit terms and conditions observed in the previous two survey rounds.Respondents reported a significant easing of overall credit terms for all counterparty types. This overall easing masks some divergence between price and non-price terms. Whereas

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Isabel Schnabel: Interview with Handelsblatt

21 days ago

INTERVIEWInterview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Jan Mallien and Frank Wiebe3 November 2020Ms Schnabel, a new wave of the coronavirus (COVID-19), a new lockdown. Will the impact on the economy be a repeat of what we already experienced in the spring? No, the effects are likely to be less pronounced this time, because the lockdown is more targeted. It is a hard blow to the services sector, but manufacturing is not being shut down and is benefiting from China’s strong recovery. After a surprisingly good third quarter, we will likely see a marked decline in growth at the end of the year.Are governments doing enough to mitigate the consequences? Fiscal policy will once again have an important role to play. Germany has already decided on new

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Yves Mersch: Legal aspects of the ECB’s response to the coronavirus (COVID-19) pandemic – an exclusive but narrow competence

22 days ago

SPEECHKeynote speech by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the ESCB Legal ConferenceFrankfurt am Main, 2 November 2020 Exploring the legal framework governing the ECB’s actions – scope and general legal principles When exploring the scope of our actions we are cognisant that the ECB has exclusive but narrow competence to define the European Union monetary policy for the purpose of maintaining price stability. Moreover, the European Court of Justice has consistently held that the ECB enjoys broad discretion in defining monetary policy within its mandate to pursue the objective of price stability. Discretion without limits increases the risk of arbitrariness. Therefore the Court has insisted on being able to control

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Results of the ECB Survey of Professional Forecasters in the fourth quarter of 2020

25 days ago

PRESS RELEASE30 October 2020HICP inflation expectations for 2020 and 2021 revised down slightly, while longer-term inflation expectations broadly unchangedExpected profile of real GDP revised up slightly, with slightly milder downturn in 2020 and rebound in 2021Unemployment rate expectations revised down across all horizonsRespondents to the European Central Bank (ECB) Survey of Professional Forecasters (SPF) for the fourth quarter of 2020 reported point forecasts for annual HICP inflation averaging 0.3%, 0.9% and 1.3% for 2020, 2021 and 2022 respectively. These results represent downward revisions of 0.1 percentage points for both 2020 and 2021. Average longer-term inflation expectations (which, like all other longer-term expectations in this round of the SPF, refer to 2025) edged up to

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

25 days ago

October 202030 October 2020Market operationsAmendments to monetary policy implementation guidelinesOn 25 September 2020 the Governing Council adopted amendments to the ECB legal framework for the implementation of monetary policy, applicable from 1 January 2021. Under the amended Guidelines, no secured marketable assets other than asset-backed securities and covered bonds would be accepted as Eurosystem collateral. The ECB will also phase out non-legislative covered bonds (i.e. contractual covered bonds) from the Eurosystem collateral framework. The amended Guidelines also clarify the application process and acceptance criteria for external credit assessment institutions in the Eurosystem credit assessment framework, and furthermore amend the Eurosystem monetary policy counterparty

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

26 days ago

INTRODUCTORY STATEMENTChristine Lagarde, President of the ECB,Luis de Guindos, Vice-President of the ECBFrankfurt am Main, 29 October 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 resurgence in coronavirus (COVID-19) infections presents renewed challenges to public health and the growth prospects of the euro area and global economies. Incoming information signals that the euro area economic recovery is losing momentum more rapidly than expected, after a strong, yet partial and uneven, rebound in economic activity

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Monetary policy decisions

26 days ago

PRESS RELEASE29 October 2020In the current environment of risks clearly tilted to the downside, the Governing Council will carefully assess the incoming information, including the dynamics of the pandemic, prospects for a rollout of vaccines and developments in the exchange rate. The new round of Eurosystem staff macroeconomic projections in December will allow a thorough reassessment of the economic outlook and the balance of risks. On the basis of this updated assessment, the Governing Council will recalibrate its instruments, as appropriate, to respond to the unfolding situation and to ensure that financing conditions remain favourable to support the economic recovery and counteract the negative impact of the pandemic on the projected inflation path. This will foster the convergence of

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ECB adopts opinion on appointment of new Executive Board member

27 days ago

PRESS RELEASE28 October 2020Governing Council has no objection to proposed candidate Frank Elderson The Governing Council of the European Central Bank (ECB) today adopted an opinion on a recommendation from the Council of the European Union on the appointment of a member of the ECB’s Executive Board.The Governing Council had no objection to the proposed candidate, Frank Elderson, 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. Mr Elderson currently serves as an Executive Director of Supervision at De Nederlandsche Bank and is a member of the ECB’s Supervisory Board. Mr Elderson also chairs the Network of Central Banks and Supervisors for Greening the

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October 2020 euro area bank lending survey

28 days ago

PRESS RELEASE27 October 2020Credit standards tightened for loans to enterprises and householdsFirms’ demand for loans moderated due to lower emergency liquidity needsBank lending strongly supported by ECB measuresCredit standards – i.e. banks’ internal guidelines or loan approval criteria – tightened across all loan categories, namely loans to enterprises, loans to households for house purchase and consumer credit and other lending to households in the third quarter of 2020, according to the October 2020 bank lending survey (BLS). The net percentage of banks reporting a tightening of credit standards for loans or credit lines to firms (net percentage of banks at 19%, see Chart 1) comes after favourable developments in the previous round. Credit standards for loans to households continued

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Fabio Panetta: On the edge of a new frontier: European payments in the digital age

October 22, 2020

SPEECHKeynote speech by Fabio Panetta, Member of the Executive Board of the ECB, at the ECB Conference “A new horizon for pan-European payments and digital euro”Frankfurt am Main, 22 October 2020IntroductionIt is a great pleasure for me to open this conference on the new horizon for European payments. Payments are indispensable to our daily lives and to the functioning of our economies. They allow money to fulfil its role as a dependable means of exchange and thereby help to maintain trust in our currency. As central bankers, we have therefore been tasked with ensuring the smooth functioning of payment systems.Payments are undergoing fundamental change, driven by the digital revolution and its impact on the demand for new forms of payment, the provision of innovative payment services and

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ECB enhances internal whistleblowing framework

October 21, 2020

PRESS RELEASE21 October 2020Enhanced rules and new internal tool to enable staff to speak up in confidenceSecure online platform allows for anonymous reportingDedicated rules and processes protect whistleblowers from retaliationThe European Central Bank (ECB) has today announced an enhanced internal whistleblowing framework to protect the integrity of the institution. It encompasses a new internal tool for simple and secure reporting of potential breaches of professional duties, inappropriate behaviour or other irregularities, and the possibility for whistleblowers and witnesses to request protection from retaliation. The new IT tool also allows for anonymous reporting.“Acting in an ethical manner goes beyond a mere compliance with law, rules and policies. It is a commitment guiding our

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Luis de Guindos: Loukas Karabarbounis’s contribution to research on the interaction between labour and capital market imperfections and macroeconomic outcomes

October 21, 2020

SPEECHRemarks by Luis de Guindos, Vice-President of the ECB, on the occasion of the award of the Bernácer Prize to Professor Loukas KarabarbounisFrankfurt am Main, 21 October 2020It is a pleasure for me to celebrate with you the award of the 2019 Bernácer Prize to Loukas Karabarbounis, Professor of Economics at the University of Minnesota.[1] As you know, the Bernácer Prize has been awarded every year since 2001 to an outstanding young European economist working in the fields of macroeconomics and finance. The rigour, innovative approaches and policy relevance of Loukas’s work make him a deserved recipient of this prize and, more generally, of the recognition from both academics and policymakers. Loukas has been awarded the Bernácer Prize for his “influential research on the interaction

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