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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

Luis de Guindos: Financial innovation for inclusive growth: a European approach

2 days ago

SPEECHSpeech by Luis de Guindos, Vice-President of the ECB, at the conference Financial Integration and Inclusive Development – A View from the Mediterranean Countries, jointly organised by Banco de España, OECD and European Institute of the Mediterranean (IEMed)Madrid, 13 December 2019IntroductionThe benefits of technological innovation are tangible: we can see them and experience them in our everyday lives. Financial services are an integral part of our daily activities and are deeply affected by advances in technology. Payment services have changed considerably in recent years, driven by new technologies and shifts in consumer preferences. Instant person-to-person (P2P) retail payment solutions are now a reality in many countries[1] and are increasingly available for consumers and

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

3 days ago

INTRODUCTORY STATEMENTChristine Lagarde, President of the ECB,Luis de Guindos, Vice-President of the ECB,Frankfurt am Main, 12 December 2019Jump to the transcript of the questions and answersLadies and gentlemen, welcome to our press conference. Today is the first time that I have had the privilege and pleasure of chairing the monetary policy meeting of the Governing Council of the ECB. I am delighted to proceed now with reporting on the outcome of our meeting, together with the Vice-President. The Governing Council meeting was also attended by the Commission Executive 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 until we have seen the

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Monetary policy decisions

3 days ago

PRESS RELEASE12 December 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 -0.50% 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.On 1 November net purchases were restarted under the Governing Council’s asset purchase programme (APP) at a monthly pace of €20 billion. The Governing Council

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ECB adopts opinion on appointment of new Executive Board member

4 days ago

PRESS RELEASE11 December 2019Governing Council has no objection to proposed candidate Isabel SchnabelThe 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, Isabel Schnabel, 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 Schnabel currently serves as a member of the German Council of Economic Experts and is a professor for financial economics at Bonn University.Following the Governing Council’s opinion and an opinion of the European Parliament,

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Benoît Cœuré: The single currency: an unfinished agenda

12 days ago

Speech by Benoît Cœuré, Member of the Executive Board of the ECB, at the ECB Representative Office in Brussels, 3 December 2019It is my pleasure to welcome you here tonight to the ECB’s representative office in Brussels. It is overwhelming to see so many long-standing companions and friends.This office was established in the midst of the euro area sovereign debt crisis in 2011. Today, the Brussels office is part and parcel of the ECB. It is our eyes and ears on all European matters, thanks to the unwavering commitment and dedication of our staff here on the ground. Their network is essential for us to get first-hand insights and intelligence from Brussels.Maintaining a high level of cooperation and dialogue with our main European stakeholders is essential, as also exemplified by our

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Luis de Guindos: Interview with El Mundo

13 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Pablo Rodríguez Suanzes on 25 November 20192 December 2019How are you finding life in Frankfurt? Frankfurt is a nice city, I like it. The ECB is the most important institution in the framework of the EU, and of the euro area in particular. Exposure to the public is very different to when you’re in government. Here, the relationship is mainly with the European Parliament, through hearings, and with the public, through speeches. Is my life better? It’s different.How do you feel about not being able to speak as freely as before?I can keep speaking normally. I still attend the Economic and Financial Affairs Council (ECOFIN); each week, we have discussions in various forums on issues around monetary and economic

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

13 days ago

SPEECHIntroductory statement by Christine Lagarde, President of the ECB, at the ECON committee of the European ParliamentBrussels, 2 December 2019Madam Chair,Honourable members of the Economic and Monetary Affairs Committee,Ladies and gentlemen,I am very happy to be back before this Committee for my first regular hearing as ECB President. I want to express my personal and sincere gratitude to this house for the support I received during the appointment process. And I look forward to a constructive and positive relationship between our two institutions going forward. The connection between the ECB and the European Parliament is especially valuable today as a means to reinforce trust in European institutions. In the euro area, support for the single currency has grown steadily in recent

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

13 days ago

SPEECHIntroductory statement by Christine Lagarde, President of the ECB, at the ECON committee of the European ParliamentBrussels, 2 December 2019Madam Chair,Honourable members of the Economic and Monetary Affairs Committee,Ladies and gentlemen,I am very happy to be back before this Committee for my first regular hearing as ECB President. I want to express my personal and sincere gratitude to this house for the support I received during the appointment process. And I look forward to a constructive and positive relationship between our two institutions going forward. The connection between the ECB and the European Parliament is especially valuable today as a means to reinforce trust in European institutions. In the euro area, support for the single currency has grown steadily in recent

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Luis de Guindos: Interview with El Mundo

13 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Pablo Rodríguez Suanzes on 25 November 20192 December 2019How are you finding life in Frankfurt? Frankfurt is a nice city, I like it. The ECB is the most important institution in the framework of the EU, and of the euro area in particular. Exposure to the public is very different to when you’re in government. Here, the relationship is mainly with the European Parliament, through hearings, and with the public, through speeches. Is my life better? It’s different.How do you feel about not being able to speak as freely as before?I can keep speaking normally. I still attend the Economic and Financial Affairs Council (ECOFIN); each week, we have discussions in various forums on issues around monetary and economic

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Luis de Guindos: Closing remarks

16 days ago

Closing remarks by Luis de Guindos, Vice-President of the ECB, at the VIII High-level Policy Dialogue between Eurosystem and Latin American central banksCartagena, 29 November 2019After two days of fruitful discussions, I would like to thank you for a lively and honest exchange of views. I am grateful for your openness in sharing experiences and for the positive discussions on topics that are highly relevant for policymakers everywhere.Let me briefly summarise the key topics we addressed and give you my main takeaways from this meeting:We looked at fostering growth and trade. Protracted weakness and the persistence of prominent downside risks are not only common factors in many of our economies, but are also global phenomena. The weakness in global trade growth – which has decelerated

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Report on the results of the Survey on the Access to Finance of Enterprises in the euro area – April to September 2019

16 days ago

PRESS RELEASE29 November 2019Survey results consistent with expectations of subdued growth Lack of availability of skilled labour and difficulty finding customers dominant concerns for SMEsSMEs’ financing conditions and access to finance remain favourable despite a deterioration in the general economic outlookFor the period from April to September 2019 the net percentage of euro area small and medium-sized enterprises’ (SMEs) turnover remained broadly stable at robust levels (20%, down from 21% for the previous period). For the first time since mid-2016, euro area SMEs reported a deterioration in profits in net terms (-1%, down from 0%), as SMEs continued to report growing labour costs (50%, down from 52%), increases in other costs (i.e. material and energy) (53%, down from 57%), and

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Philip R. Lane: Determinants of the real interest rate

17 days ago

SPEECHRemarks by Philip R. Lane, Member of the Executive Board of the ECB, at the National Treasury Management AgencyDublin, 28 November 2019It is a pleasure to address the Annual Investee and Business Leaders’ Dinner organised by the National Treasury Management Agency (NTMA).[1] I plan today to explore some of the factors determining the evolution of the real (that is, inflation-adjusted) interest rate over time.This is obviously relevant to the NTMA in its role as manager of Ireland’s national debt and also to its other business areas (Ireland Strategic Investment Fund; State Claims Agency; NewEra; National Development Finance Agency) and related entities (National Asset Management Agency; Strategic Banking Corporation of Ireland; Home Building Finance Ireland). More generally, the real

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Benoît Cœuré: Economics as a profession: from science to practice

17 days ago

SPEECHRemarks by Benoît Cœuré, Member of the Executive Board of the ECB, at the PSE job forum, Paris School of EconomicsParis, 28 November 2019It is a true pleasure to be back here at the Paris School of Economics (PSE).You are now on the home stretch. I well remember how I felt during my own final year: excited, anxious and curious all at once.Over the next few months, you will need to take serious, life-changing decisions. The data suggest there is about a two-in-three chance that you will pursue further studies. For many, a master’s degree is a natural step towards a PhD. And a PhD is essentially a promise of employment. In the United States, for example, the unemployment rate for PhD economists is about 0.8%, the lowest among all sciences.[1] Not a bad place to start from. But a PhD is

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Christine Lagarde: Welcome address

18 days ago

SPEECH Welcome address by Christine Lagarde, President of the ECB, on signing the euro banknotesFrankfurt am Main, 27 November 2019I’m honoured to be here to sign the euro banknotes, something that has become a customary ritual for the beginning of each ECB presidency. Before I pick up my pen, however, I would like to say a few words on the importance of this occasion. The great economist John Kenneth Galbraith once said, “When money is bad, people want it to be better. When it is good, they think of other things”.His point was that we want sound money not as an end in itself, but because it frees people to do more useful things with their lives: to work, to innovate, to invest.And this, ultimately, is why the ECB exists – to secure that trust in money so that people can focus on what

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Benoît Cœuré: Towards the retail payments of tomorrow: a European strategy

19 days ago

SPEECHSpeech by Benoît Cœuré, Member of the Executive Board of the ECB, at the Joint Conference of the ECB and the National Bank of Belgium on “Crossing the chasm to the retail payments of tomorrow” Brussels, 26 November 2019Europe has made important progress towards a true banking union in recent years. We now have a single banking supervisor for significant institutions, a single framework for resolving failing institutions, a single fund to finance those resolution activities, and we will soon have a single backstop for that fund. There are also renewed hopes that political negotiations could soon begin on a European deposit insurance scheme. The European Commission has also launched an ambitious agenda for creating a capital markets union. Although the pace at which co-legislators, and

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Yves Mersch: From Basel III to European banking regulation

20 days ago

SPEECHDinner speech by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the IIF 6th Annual European Banking Union ColloquiumFrankfurt am Main, 25 November 2019IntroductionFree markets are the best way of organising an economy – on the whole. And the ECB is constitutionally committed to this principle. But public goods generally require some degree of regulation to protect the interests of society. Financial stability is one of these public goods, embedded in the price stability goal. The ECB contributes to the smooth conduct of policies pursued by the competent authorities to preserve financial stability, and in the pursuit of its microprudential mandate, it has also been assigned some responsibility for macroprudential

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Philip R. Lane: The yield curve and monetary policy

20 days ago

SPEECHSpeech by Philip R. Lane, Member of the Executive Board of the ECB, Public Lecture for the Centre for Finance and the Department of Economics at University College LondonLondon, 25 November 2019IntroductionIt is a pleasure to speak this evening at University College London (UCL). In my contribution, I wish to share some thoughts about the yield curve and monetary policy.[1]UK data offer scholars a unique opportunity to take a very long view: the long-term nominal gilt yields shown in Chart 1 reach all the way back to 1826, the founding year of UCL. Over the past 200 years, gilt yields have never been as low as today. That long-term nominal yields have decreased substantially over recent decades is not specific to the United Kingdom but applies across advanced economies: long-term

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Philip R. Lane: Interview with Sky TG24

22 days ago

INTERVIEWTranscript of the interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Alessandro Marenzi, Sky TG24, with the participation of Federico Fubini, Corriere della Sera, and Franco Bruni, Bocconi University, broadcast on 23 November 201923 November 2019Alessandro Marenzi: Sette anni fa Draghi disse: faremo tutto quello che serve per preservare l’euro. [..] Dopo sette anni c’è ancora questo problema di preservare l’euro o non si pone nemmeno più la questione?Philip Lane: What we have seen in the last seven years is a very long track record of a very stable currency. Remember what we have seen in these years: we’ve seen the interest rates in Europe very low, the spreads between governments much more narrow, and the inflation is controlled. So, yes, a very

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Christine Lagarde: The future of the euro area economy

23 days ago

SPEECHSpeech by Christine Lagarde, President of the ECB, at the Frankfurt European Banking CongressFrankfurt am Main, 22 November 2019It is a pleasure to be speaking here this morning at the European Banking Congress. This is my first opportunity to meet the mayor and Frankfurt’s financial community – and I am sure it will be the first of many. T.S. Eliot said that “every moment is a fresh beginning” and it certainly feels that way for me today. But in many respects it feels that way for Europe, too. The theme of this year’s programme is “Europe: New Approaches”, and that seems very fitting.The idea of European renewal may, for some, elicit feelings of cynicism. We have heard it many times before: “Europe is at a crossroads”; “now is Europe’s moment”. Often that has not proven to be the

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Yves Mersch: Future-proofing the European banking market – removing the obstacles to exit

24 days ago

SPEECHSpeech by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the S&P Global’s European Financial Institutions Conference, Paris21 November 2019Consolidation seems to be something of a buzzword. It is associated with discussions of the profitability of banks, with debates on overbanking or the optimal size of a banking area, and with issues of competition. From a prudential supervision perspective, I’m concerned about efficient market functioning and sound banking structures. And as a central banker, my goal is to maintain a smooth transmission mechanism.Between 2008 and 2012, spurred by the crisis, we saw more than four times as many US banks fail than EU ones. That was not because European banks were healthier than their US

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Luis de Guindos: Implications of the transition to a low-carbon economy for the euro area financial system

24 days ago

SPEECHSpeech by Luis de Guindos, Vice-President of the ECB, at the European Savings and Retail Banking Group Conference, “Creating sustainable financial structures by putting citizens first”Brussels, 21 November 2019IntroductionClimate change is not new. Scientists have been warning of the risks of rising global temperatures for decades. Recently, these risks have gained greater prominence in public discussions, leading to enhanced international action. The Paris Agreement of December 2015 aims to keep the rise in global temperatures below 2°C above pre-industrial times, and to pursue efforts to limit it to 1.5°C. Without further mitigating action, that increase will more likely than not exceed 4°C by the end of the century in most scenarios.[1]Central banks need to understand better the

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Account of the monetary policy meeting

24 days ago

Of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 23-24 October 20191. Review of financial, economic and monetary developments and policy optionsFinancial market developmentsMr Cœuré reviewed the latest financial market developments. Since the Governing Council’s last monetary policy meeting on 11-12 September 2019, the prospect of a breakthrough in the trade negotiations between the United States and China, as well as declining fears of a “no-deal” Brexit, had helped to underpin global market sentiment. In the euro area, the overnight index swap forward curve had shifted upwards at both the short and the long end, and it had also become notably steeper in 2021 compared with the situation in September 2019. In the United States, the

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Euro area financial stability environment remains challenging

25 days ago

PRESS RELEASE20 November 2019Low interest rates support economic activity, but there can be side effectsSigns of excessive risk-taking in some sectors require monitoring and targeted macroprudential action in some countriesBanks have further increased resilience, but have made limited progress in improving profitabilityDownside risks to global and euro area economic growth have increased and continue to create financial stability challenges, according to the November 2019 Financial Stability Review (FSR) of the European Central Bank (ECB). Low interest rates should support economic activity in the euro area, but may also encourage excessive risk-taking by some non-bank financial institutions and highly leveraged non-financial corporations, and in some real estate markets.“While the low

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Philip R. Lane: Interview with La Repubblica

25 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Tonia Mastrobuoni on 14 November 201920 November 2019Christine Lagarde takes office as President of the ECB at a difficult moment. The Governing Council is split about the decisions taken in September. I wouldn’t agree with your description! Of course, the September decision did have pros and cons, and it was not unanimous. But now we are two months on. That decision is made and we are moving forwards. Moreover, at Governing Council level this year there are many new members. It’s natural, with a new composition, to have discussions about how we operate as a group.How’s the economic situation in the eurozone? Despite fears it could slip into recession, Germany’s growth has slightly ticked up. In

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Philip R. Lane: Q&A with Fortune

25 days ago

INTERVIEW20 November 2019Q&A with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Maithreyi Seetharaman on 18 November 2019 at Fortune Global ForumThe following is a transcript of an on stage question and answer.This is almost a time of new beginnings in Europe in many, many ways – especially as of 1 November – but it’s new beginnings for you as well. It’s been six months since you joined the ECB as its Chief Economist, and a big role change going from the Governor of the Central Bank of Ireland to now looking at the eurozone as a whole. Here’s a curiosity question: the ECB had a retreat just a few days ago and it was in a very grand palace – probably grander than this – to build fences, get to know each other. What’s the new leadership of the European Central Bank

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Luis de Guindos: Opportunities and challenges for the euro area financial sector

27 days ago

SPEECHOpening speech by Luis de Guindos, Vice-President of the ECB, at the 22nd Euro Finance WeekFrankfurt am Main, 18 November 2019I am honoured to open the 22nd Euro Finance Week. We gather here every year to discuss the recent financial and economic developments in the euro area and beyond. As we are going to publish our Financial Stability Review in two days’ time, today I will focus on the health of euro area financial institutions and the opportunities and challenges they face in the current environment. I will also offer some policy considerations.Opportunities and challenges for euro area banks Let me start with euro area banks, which have been reporting persistently low profitability in recent years. The aggregate return on equity of the sector slightly declined to less than 6% in

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Yves Mersch: Anti-money laundering and combating the financing of terrorism – recent initiatives and the role of the ECB

November 15, 2019

Speech by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the Colloque de l’AEDBF-Europe, Paris, 15 November 2019IntroductionA number of high-profile cases of the alleged systematic use of banks for money laundering have been reported over the last two years, along with reports of investigations and other follow-up measures being taken by national authorities. This has put anti-money laundering (AML) and combating the financing of terrorism (CFT) high on the agenda of policymakers at both the European and global levels. The European Commission, EU legislators and other authorities all rightly agree that misuse of the financial system cannot be tolerated. They have started to strengthen the EU’s AML/CFT framework, and further

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

November 15, 2019

November 201915 November 2019Market operationsQuinquennial review of the Agreement on Net Financial AssetsOn 25 October 2019 the Governing Council approved a revised Agreement on Net Financial Assets (ANFA). ANFA is an agreement between the national central banks (NCBs) of the euro area and the ECB that sets rules and limits for non-monetary policy holdings related to the national tasks of the NCBs. ANFA is reviewed at least every five years. This year’s revisions are mainly limited to ensuring the consistency of the agreement with the monetary policy environment of excess liquidity for the foreseeable future and to introducing necessary operational refinements. The revised ANFA is available on the ECB’s website.Financial stability and supervisionFinancial Stability Review November 2019On

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Philip R. Lane: The international transmission of monetary policy

November 14, 2019

SPEECHKeynote speech by Philip R. Lane, Member of the Executive Board of the ECB, CEPR International Macroeconomics and Finance Programme MeetingFrankfurt am Main, 14 November 2019It is a pleasure to speak at the annual meeting of the CEPR’s International Macroeconomics and Finance (IMF) Programme, hosted this year here at the ECB.[1],[2] I briefly led this programme before my switch to central banking in 2015 and my aim in this speech is to explore some inter-connections between the research agenda of this programme’s research agenda and the analytics of the monetary policy issues that occupy me in my current role. In particular, I wish to focus on the international transmission of the ECB’s monetary policy, which is central to evaluating how our monetary policy affects both the euro area

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