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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

Fabio Panetta: Interview with El País

1 day ago

Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Luis Doncel and published on 11 April 2021
11 April 2021
The recovery in the euro area is still very fragile, and the vaccine rollout is progressing slowly. How is this slow progress affecting the economy?
Uncertainty has receded to some extent, but is still high. The vaccine rollout is accelerating but remains slow. And in a number of countries the pandemic is spreading fast, which is weighing on the economic outlook. While the US economy will return to its pre-crisis levels this year, we will not do so before mid-2022. And, unlike the United States, we will not return to our pre-crisis growth path, meaning that we may have permanently lost two years of growth. Inflation is projected to remain well

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Isabel Schnabel: Interview with Der Spiegel

3 days ago

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Tim Bartz and Stefan Kaiser on 1 April and published on 9 April 2021, in print on 10 April 2021
9 April 2021
Ms Schnabel, the global economy is only slowly recovering from one of the most severe economic crises in living memory, but the mood on stock markets is better than ever. Do you find that a cause for concern?
We are closely monitoring this. Developments in Europe have not been extreme up to now, but there are signs of excesses here too, for example in the real estate market. In the United States, the cyclically adjusted price/earnings ratio is now higher than it was before the financial crisis of 2008.
Have equity and real estate prices reached such heights again that they are bound to

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Meeting of 10-11 March 2021

4 days ago

Account of the monetary policy meeting of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 10-11 March 2021
1. Review of financial, economic and monetary developments and policy options
Financial market developments
Ms Schnabel reviewed the financial market developments since the Governing Council’s previous monetary policy meeting on 20-21 January 2021.
Sovereign yield curves across advanced economies had steepened, while new coronavirus (COVID-19) cases had fallen, the pace of vaccination had accelerated and a large fiscal stimulus programme in the United States was expected to be soon put into law. The measurable rise in commodity prices had added to upward pressure on long-term nominal bond yields. The increase in long-term

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Christine Lagarde: IMFC Statement

4 days ago

Statement by Christine Lagarde, President of the ECB, at the forty-third meeting of the International Monetary and Financial Committee
Virtual IMF Spring Meetings, 8 April 2021
Since the previous IMFC meeting in October 2020, global prospects have improved thanks to the progress made in vaccination campaigns and the forceful policy support provided to our economies. However, this brighter outlook remains subject to considerable uncertainty, also regarding the path of the pandemic and the rollout of vaccinations. We must therefore continue to stand together to address this severe global challenge. In this environment, it is crucial to refrain from withdrawing policy support prematurely, either on the monetary or fiscal side. At the same time, it is essential to push ahead with

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Philip R. Lane: Stabilising the economic outlook

16 days ago

Remarks by Philip R. Lane, Member of the Executive Board of the ECB, at “The Outlook for the Economy and Finance” workshop (fully digital) organised by The European House − Ambrosetti
Frankfurt am Main, 27 March 2021
The theme of this panel is the “Competitiveness of Europe and of the European Financial Markets”. Although the near-term focus of everyone is predominantly on combating the pandemic, it is also necessary and appropriate for us to examine the longer-term determinants of income levels and living standards.
Let me emphasise that shorter-term and longer-term economic performance are inextricably linked, especially in the current circumstances. In particular, a sustained period of below-capacity economic activity damages the longer-term productive capacity of the economy

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

17 days ago

March 2021
26 March 2021
External communication
ECB’s Annual Report 2020
On 24 March 2021 the Governing Council adopted the ECB’s Annual Report 2020, which will be presented to the Committee on Economic and Monetary Affairs of the European Parliament and made available on the ECB’s website in 22 official languages of the European Union on 14 April 2021.
Monetary policy
Central bank compliance with prohibitions on monetary financing and privileged access
On 24 March 2021, in accordance with the Treaty on the Functioning of the European Union (TFEU), which assigns to the ECB the task of monitoring the compliance of EU central banks with the prohibitions referred to in Articles 123 and 124 of the TFEU and the related regulations, the Governing Council approved the compliance report

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Isabel Schnabel: Paving the path to recovery by preserving favourable financing conditions

18 days ago

Speech by Isabel Schnabel, Member of the Executive Board of the ECB, at NYU Stern Fireside Chat
Frankfurt am Main, 25 March 2021
For more than a year now, central banks worldwide have been tackling the fallout from the coronavirus (COVID-19) crisis with unprecedented measures. The pandemic has posed enormous challenges to monetary policy, which have varied over time.
The first phase of the crisis caused severe dislocations in global financial markets. Liquidity dried up, asset prices plunged and markets became fragmented, causing a broad-based flight to the safest assets in what became known as a “dash for cash”.
By offering to purchase large amounts of securities, central banks succeeded in restoring orderly trading conditions. In the euro area, we established the pandemic emergency

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Philip R. Lane: Interview with CNBC

20 days ago

Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Annette Weisbach on 22 March 2021
23 March 2021
Let me bring you first to the increased asset purchases. Your asset purchases are now at €21 billion, is that a level the market should get used to now?
As you know, the weekly data are always confounded a bit by redemptions and the week-to-week special factors, but it does reflect our commitment to have a substantial increase in the pace of purchasing. I wouldn’t take any one week in isolation, but of course if you average over several weeks you will see the substantial increase in a consistent way.
If you look at the situation in the bond markets, why are you so concerned? Because if you deduct inflation from the nominal rate, real rates are not

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

25 days ago

Introductory statement by Christine Lagarde, President of the ECB, at the Hearing of the ECON Committee of the European Parliament (by videoconference)
Frankfurt am Main, 18 March 2021
Madam Chair,
Honourable members of the Economic and Monetary Affairs Committee,
Ladies and gentlemen,
I am very happy to appear again before the Committee in our first regular hearing this year.
Today marks the one-year anniversary of the extraordinary Governing Council meeting during which we decided to launch the pandemic emergency purchase programme (PEPP).
Standing where we are today, the economic situation looks brighter now than it did back then and we can expect it to improve over 2021. In the short term, however, the economic outlook for the euro area remains surrounded by uncertainty due

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Luis de Guindos: Banking union: achievements and challenges

25 days ago

Speech by Luis de Guindos, Vice-President of the ECB, at the High-level conference on “Strengthening the EU’s bank crisis management and deposit insurance framework: for a more resilient and efficient banking union” organised by the European Commission
18 March 2021
Setting up the banking union was a crucial step in ensuring the stability of the euro area financial system and strengthening Economic and Monetary Union (EMU). The global financial crisis and sovereign debt crisis highlighted the need to make faster progress towards completing EMU. More than a decade on, now is a good time to take stock of where we stand in the banking union: what we have achieved and what works, but also what remains to be done.
With ECB Banking Supervision at the heart of the Single Supervisory

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Frank Elderson: Q&A on Twitter

26 days ago

Interview on Twitter with Frank Elderson, Member of the Executive Board of the ECB, conducted and published on 16 March 2021
17 March 2021
Hello, this is @FrankElderson, Executive Board member at the ECB. I’m looking forward to answering your questions for the next 45 minutes or so. Join the conversation! #AskECB
#AskECB Why dont you better explain your policies by indicating the aimed positive consequences, but also the potential negatives.
@FrankElderson: While the evidence is that our policies are very effective we certainly also have possible side effects on our radar. The two-tier system is a case in point where we have reacted to mitigate the potential side effects of our negative rate policy on banks #AskECB
#AskECB How will the ECB evaluate and quantify the climate risk

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Isabel Schnabel: Interview with Les Echos

26 days ago

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Guillaume Benoit, Elsa Conesa, Lucie Robequain and Sophie Rolland
16 March 2021
There has been a delay in the supply of vaccines in Europe. To what extent does that jeopardise the EU’s recovery?
The recovery crucially depends on the pace of vaccinations. The vaccination campaign got off to a slow start, but it has accelerated in most Member States. Our projections for the short term show a deterioration due to the resurgence of the virus and the new containment measures imposed in several countries. But the good news is that in the last quarter of 2020, the lockdowns caused less damage than during the first wave of the pandemic. The economy seems to be adapting better to the situation. The

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Philip R. Lane: Interview with the Financial Times

27 days ago

Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Martin Arnold
16 March 2021
What impact has the pandemic had on the eurozone?
A pandemic recession is unique because a lot of the decline in output results from public health measures. When these measures are lifted and the virus is contained, you should expect to see a very large recovery. We saw glimpses of that last year, especially in the third quarter. As the economy was unlocked and while infection rates were at a relatively low level, there was a strong recovery above what we had predicted.
Once we get better control of the virus we should expect to see most of the economy just go back to normal. There can be exceptions, though, such as the question of office work versus working from home.

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Monetary policy decisions

March 11, 2021

11 March 2021
The Governing Council took the following decisions:
First, the Governing Council will continue to conduct net asset purchases under the pandemic emergency purchase programme (PEPP) with a total envelope of €1,850 billion until at least the end of March 2022 and, in any case, until it judges that the coronavirus crisis phase is over. Based on a joint assessment of financing conditions and the inflation outlook, the Governing Council expects purchases under the PEPP over the next quarter to be conducted at a significantly higher pace than during the first months of this year.
The Governing Council will purchase flexibly according to market conditions and with a view to preventing a tightening of financing conditions that is inconsistent with countering the downward impact

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Christine Lagarde, Luis de Guindos: Introductory statement to the press conference

March 11, 2021

Christine Lagarde, President of the ECB,Luis de Guindos, Vice-President of the ECB
Frankfurt am Main, 11 March 2021
Jump to the transcript of the questions and answers
Ladies 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 the meeting of the Governing Council, which was also attended by the Commission Executive Vice-President, Mr Dombrovskis.
While the overall economic situation is expected to improve over 2021, there remains uncertainty surrounding the near-term economic outlook, relating in particular to the dynamics of the pandemic and the speed of vaccination campaigns. The rebound in global demand and additional fiscal measures are supporting global and euro area activity. But persistently

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

March 3, 2021

3 March 2021
Overall credit terms and conditions unchanged but some divergence between price and non-price terms
Substantial decreases in financing rates/spreads for funding secured by all types of collateral except equities
Weaker demand for funding across all types of collateral except equities
Market-making activities increased in 2020 for both debt securities and derivatives owing to risk-taking and the growing importance of electronic trading platforms
Following significant changes in the previous three reporting periods, overall credit terms and conditions remained broadly unchanged over the September 2020 to November 2020 review period. At the same time, there was some divergence between price and non-price terms. Whereas price terms tightened slightly for all

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Fabio Panetta: Central clearing and the changing landscape

March 3, 2021

Welcome address by Fabio Panetta, Member of the Executive Board of the ECB, at the Third Annual Joint Conference of the Deutsche Bundesbank, European Central Bank and Federal Reserve Bank of Chicago on CCP Risk Management
Frankfurt am Main, 3 March 2021
Introduction[1]
It is with great pleasure that I welcome you to the third conference on central counterparty (CCP) risk management, organised by the ECB together with the Deutsche Bundesbank and the Federal Reserve Bank of Chicago. This event has become an increasingly relevant international forum to discuss key challenges surrounding central clearing.
In my remarks today, I will reflect on key developments since we met a year ago. The coronavirus (COVID-19) pandemic is naturally foremost in my mind – the turmoil that hit financial

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Isabel Schnabel: From green neglect to green dominance?

March 3, 2021

Intervention by Isabel Schnabel, Member of the Executive Board of the ECB, at the “Greening Monetary Policy – Central Banking and Climate Change” online seminar, organised as part of the “Cleveland Fed Conversations on Central Banking”, 3 March 2021
Frankfurt am Main, 3 March 2021
Climate change is one of the biggest challenges that humankind is facing.[1] It exposes our society and economy to substantial risks – both physical risks resulting from the greater incidence of climate-related disasters, and transition risks arising from policy responses – that could potentially impair the balance sheets of households, firms, financial institutions and central banks.
There can be no doubt that climate change also poses risks for price stability, for example by hampering monetary

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Luis de Guindos: Interview with Público

March 2, 2021

Interview with Luis de Guindos, Vice-President of the European Central Bank (ECB), conducted by Sérgio Aníbal
2 March 2021
The euro area economy once again stumbled at the start of 2021. Are you confident that the recovery will be consistent from now on?
The key will be the way in which the vaccination process is rolled out. If the vaccination programme can start to be accelerated in Europe, as I think is possible, then perhaps in summer we could have the majority of the European population vaccinated. And if you look at the economic indicators in the euro area, there are signs that manufacturing is doing well, while services are lagging behind. So, if vaccination starts to create immunity, the containment measures will start to gradually be lifted, and that will be very good news for

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Fabio Panetta: Mind the gap(s): monetary policy and the way out of the pandemic

March 2, 2021

Speech by Fabio Panetta, Member of the Executive Board of the ECB, at an online event organised by Bocconi University
Milan, 2 March 2021
It is a great pleasure to be back at Bocconi and share with you my views on the current economic situation.
The year ahead will present macroeconomic policymakers with critical choices.
In 2020, with the pandemic raging, the direction of policy support was obvious and the choices facing policymakers were relatively narrow. Monetary and fiscal authorities everywhere intervened to support the economy on a massive scale.
But in 2021, with the progress made on vaccine technology, policy choices have become less clear-cut. We face a situation in which the end of the pandemic emergency is in sight and an incipient recovery is on the horizon. As such,

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Christine Lagarde: The coronavirus crisis and SMEs

March 1, 2021

Speech by Christine Lagarde, President of the ECB, at the “Jahresimpuls Mittelstand 2021” of Bundesverband Mittelständische Wirtschaft
Frankfurt am Main, 1 March 2021
It is a great pleasure to have the opportunity to speak to you today.
At the ECB we care deeply about connecting with small and medium-sized enterprises (SMEs), since they are the foundation of the European economy.
SMEs make up 99.8% of all non-financial companies in the EU, provide 66.6% of jobs and generate 56.4% of added value.[1] It is decisions by companies like yours to invest, hire and innovate that put the European economy on a path to growth.
But in Germany, being part of the Mittelstand has a special quality that is about much more than the firm’s size. It is about the philosophy of how to do business and

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Luis de Guindos: Macroprudential policy after the COVID-19 pandemic

March 1, 2021

Panel contribution by Luis de Guindos, Vice-President of the ECB, at the Banque de France / Sciences Po Financial Stability Review Conference 2021 “Is macroprudential policy resilient to the pandemic?”
1 March 2021
Introduction
It is a great pleasure to be here this afternoon and share some thoughts on the future of macroprudential policy in the euro area after the coronavirus (COVID-19) pandemic.
About one year ago, the euro area was hit by a major unexpected shock: the COVID-19 pandemic. While this health and economic crisis has had, and continues to have, a severe impact on European citizens and businesses, the euro area banking sector has so far weathered the crisis well. Rather than being part of the problem, it has been part of the solution. The banking sector has managed to

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Isabel Schnabel: Unconventional fiscal and monetary policy at the zero lower bound

February 26, 2021

Keynote speech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Third Annual Conference organised by the European Fiscal Board on “High Debt, Low Rates and Tail Events: Rules-Based Fiscal Frameworks under Stress”
Frankfurt am Main, 26 February 2021
One of the greatest conundrums and policy challenges of our times is the coincidence of persistently low real long-term interest rates and low inflation.
Even before the coronavirus (COVID-19) pandemic, inflation across many advanced economies had been falling short of central banks’ aims for nearly a decade. In the euro area, hopes that inflation would sustainably recover to levels closer to 2% have been repeatedly and persistently disappointed, despite highly favourable financing conditions.
Years of subdued price

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Philip R. Lane: Interview with Expansión

February 26, 2021

Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Andrés Stumpf on 22 February
26 February 2021
After the Christmas holidays and a third wave of the pandemic, what’s the current situation of the European economy?
2021 is an unusual year. Some of the current restrictions on economic activity are going to be extended. But, while we’re facing these short-term risks, there is the prospect of vaccinations bringing a sea change in the second half of 2021. In the second quarter activity will already start to recover compared with current levels. The timing of this rebound will depend on how the public health situation develops, in terms of both the vaccinations and the delays that the mutations of the virus could cause.
If the restrictions are extended,

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Philip R. Lane: The compass of monetary policy: favourable financing conditions

February 25, 2021

Speech by Philip R. Lane, Member of the Executive Board of the ECB, at Comissão do Mercado de Valores Mobiliários
25 February 2021
Introduction
Over the last year, the pandemic has presented a series of challenges to central banks. In addition to the initial task of stabilising markets, the scale and duration of the shock to the world economy and the global financial system has required extensive monetary accommodation.[1] Looking ahead, it is clear that the successful containment of the virus and the fostering of a sustainable recovery will require an extended period of favourable financing conditions for all sectors of the economy.
In my remarks today, I will set out some considerations for thinking about favourable financing conditions as the compass guiding monetary policy.
The

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Isabel Schnabel: Interview with LETA

February 25, 2021

Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Ingūna Ukenābele on 22 February 2021
25 February 2021
How would you describe the current economic situation in the euro area?
In the course of the pandemic, we have experienced the deepest economic downturn since World War II. After the strong decline in economic activity following the first wave of infections in the spring of 2020, we saw a strong rebound, supported by the decisive fiscal and monetary policy response. This positive development was interrupted by increasing infection numbers towards the end of last year, also affecting economic activity at the start of 2021. With respect to the health situation, we continue to face substantial uncertainty due to the new variants of the virus, which

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Christine Lagarde: Investing in our climate, social and economic resilience: What are the main policy priorities?

February 22, 2021

Speech by Christine Lagarde, President of the ECB, at the opening plenary session of the European Parliamentary Week 2021 in virtual format
Frankfurt am Main, 22 February 2021
I would like to thank you warmly for inviting me to speak to you today. It is a privilege to have an opportunity to talk to the citizens’ representatives at the heart of European democracy.
Events like this one allow us to consider national debates in discussions about our common challenges as Europeans.
For all of us, the past year of the pandemic has been an extraordinary challenge. And, at all levels, the public policy response has been truly impressive. National responses have spearheaded the policy effort, with fiscal measures amounting to, on average, 4.5% of euro area GDP.
Yet the response to this

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