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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: Gabriel Zucman’s contribution to research on wealth inequality and the redistributive effects on globalization

4 days ago

SPEECHRemarks by Luis de Guindos, Vice-President of the ECB, on the occasion of the award of the Bernácer Prize to Professor Gabriel ZucmanMadrid, 11 October 2019It is a pleasure for me to celebrate with you the award of the 2019 Bernácer Prize to Gabriel Zucman, Assistant Professor of Economics at the University of California, Berkeley. Gabriel’s creative work on measuring household wealth over time and across countries and his studies on the effects of taxation and globalisation on the accumulation of wealth have become increasingly influential among academic economists and policymakers. He is a deserved recipient of the Bernácer Prize, which is awarded each year to an outstanding young European economist working in the fields of macroeconomics and finance.This year’s prize has been

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Mario Draghi: Policymaking, responsibility and uncertainty

4 days ago

SPEECHAcceptance speech by Mario Draghi, President of the ECB, for the Laurea Honoris Causa from the Università CattolicaMilan, 11 October 2019In a few weeks, I will come to the end of my term as President of the European Central Bank. Such occasions provide an opportunity to look beyond the cut and thrust of current events and to reflect on the past, trusting that the experiences we have had and the lessons we have learned, may be useful for others.In this vein, I will not focus strictly on monetary policy or the business of central banking, but I would like instead to share my thoughts on the nature of policy responsibility. In various roles, I have had the privilege of having a policy mandate conferred upon me by elected politicians: here in Italy, at the Treasury and the Banca

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Account of the monetary policy meeting

5 days ago

Of the Governing Council of the European Central Bank held in Frankfurt am Main on Wednesday and Thursday, 11-12 September 20191. Review of financial, economic and monetary developments and policy optionsFinancial market developmentsMr Cœuré reviewed the financial market developments since the Governing Council’s previous monetary policy meeting on 24-25 July 2019. Global financial markets had undergone a strong correction over the summer, which bore a close resemblance to the episode observed during the spring. The principal catalyst on both occasions was an intensification of global trade tensions.The yield on the ten-year German government bond had declined by around 35 basis points, compared with the day before the July meeting, to -71 basis points. The ten-year US Treasury yield had

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Luis de Guindos: Interview with Market News

6 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Luke Heighton on 7 October, and published on 9 October 20199 October 2019How pessimistic are you about the state of the European economy at the moment?We have a sort of two-tier economy: on the one side, we have manufacturing and exports, and on the other, we have services and domestic demand. Manufacturing and exports are clearly underperforming the rest of the economy; that’s why we have some differences among euro area countries. Germany, for example, is much more exposed to the external sector. That’s our baseline scenario. But I think the most important point is not so much that the projection has been revised downwards several times, but that we have not included in the baseline the possibility of a

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Luis de Guindos: Improving macroeconomic stabilisation in the euro area

12 days ago

SPEECHSpeech by Luis de Guindos, Vice-President of the ECB, at the Global Interdependence Center Central Banking Series conferenceMadrid, 3 October 2019IntroductionA decade after the global financial crisis, the level of economic activity in the euro area remains disappointingly low. It took nine years for real per capita GDP to surpass its 2007 level. Likewise, euro area inflation has stubbornly remained below the ECB’s aim for much of the past decade. Throughout this period, the ECB has acted decisively to support euro area demand and raise inflation onto a sustainable path towards our aim of below, but close to, 2% over the medium term. This has included lowering the key ECB rates to record low levels and adopting a wide range of non-standard monetary policy measures. By contrast, the

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Luis de Guindos: Key vulnerabilities for euro area financial stability

13 days ago

SPEECH Remarks by Luis de Guindos, Vice-President of the ECB, at the meeting of the Financial Stability Contact GroupFrankfurt am Main, 2 October 2019Let me start by thanking you all for participating in this meeting of the Financial Stability Contact Group. These meetings are a key feature of the ECB’s market intelligence gathering activities.The financial stability environment has certainly remained challenging since this group last met in March. The global economic outlook has worsened since then, and political and policy uncertainty has increased in a number of areas.Taking this into account, we continue to see four key vulnerabilities for euro area financial stability: (i) first, a risk of mispricing of some financial assets; (ii) second, high public and private sector indebtedness in

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Philip R. Lane: Globalisation and monetary policy

14 days ago

SPEECHSpeech by Philip R. Lane, Member of the Executive Board of the ECB, at the University of CaliforniaLos Angeles, 30 September 2019It is a pleasure to contribute to UCLA’s Master of Applied Economics Distinguished Speaker Series. [1] Los Angeles is a good setting for me to reflect upon the importance of globalisation: around USD 300 billion of US imports and exports pass through the port here every year – around half of which are to or from China – while Californian firms are at the forefront of many global industries.[2] Globalisation has fundamentally reshaped how the major advanced economies operate (including both the euro area and the United States). The rest of the world is a major destination for the goods and services these design and produce, while providing a broad choice of

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Mario Draghi: Stabilisation policies in a monetary union

14 days ago

SPEECHSpeech by Mario Draghi, President of the ECB, at the Academy of AthensAthens, 1 October 2019The resilience of the euro area through many years of crisis has proven its critics to be wrong. Several countries, not least Greece, have undertaken remarkable efforts in order to thrive as members of the monetary union. Important institutional reforms have taken place to strengthen the euro area, notably the creation of the banking union and the European Stability Mechanism (ESM). As I have outlined elsewhere, the euro has been beneficial in many ways,[1] and today the single currency is more popular than ever.[2]But the fact that the crisis lasted much longer here than in other advanced economies – and came with a substantial social cost – still weighs on perceptions of our monetary union.

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Philip R. Lane: Q&A with Reuters

15 days ago

INTERVIEWQ&A with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Daniel Burns on 27 September 2019 at Reuters Newsmaker in New York30 September 2019The following is a transcript of an on stage question and answer.Let me welcome Philip Lane, Member of the Executive Board of the ECB. That’s a role he went to earlier this year having served as the Governor of the Central Bank of Ireland since 2015. He has been an adviser to other international economic organisations, such as the IMF, OECD, World Bank and Asian Development Bank. He has a PhD in Economics from Harvard and earned his BA from Trinity College Dublin where, until recently, he was the Whately Professor of Political Economy. I’m also told he is a Liverpool fan, so he is riding high early in this Premier League

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Mario Draghi: Interview with Financial Times

15 days ago

INTERVIEWInterview with Mario Draghi, President of the ECB, conducted by Lionel Barber and Claire Jones on 25 June and 20 September, and published on 30 September 201930 September 2019The following is an edited transcript of the interview.Your new headquarters is very impressive. Yes and it is also symbolic as it embodies our values. Transparency and independence.What is the legacy you feel you leave behind?The ECB’s response to the crisis was crucial in preserving the euro and keeping the European Monetary Union together and always respecting its mandate.Furthermore, the ECB is nowadays a very different institution from the past. The existential challenges that it had to cope with have profoundly transformed it both as far as monetary policy and other key tasks are concerned, but also in

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ECB publishes the Euro money market study 2018

18 days ago

PRESS RELEASE27 September 2019Study shows increased activity in the secured and foreign exchange swaps segments Shows some money market rates moved below deposit facility rate, especially in secured segment First study of euro money market based on actual transactions by largest euro area banks The European Central Bank has published today its “Euro money market study 2018”. The study aims to provide a detailed overview of euro area money markets, with a focus on the key developments and dynamics in various money market segments. The 2018 study is the first using data on daily transactions in the euro money market collected from the largest euro area banks through the Money Market Statistical Regulation, ECB/2014/48. Previous Euro money market studies – including the last one published, in

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

18 days ago

August-September 201927 September 2019External communicationPublication of data on ECB foreign exchange interventionsOn 23 September 2019 the Governing Council decided to publish additional data on the ECB’s foreign exchange interventions (FXI). As of April 2020 the ECB will start publishing FXI data both in a table on its website and in the ECB Annual Report. The table, which will disclose all FXI historical data since 1999, will, on a quarterly basis, indicate whether the ECB has intervened during the quarterly review period and, if so, specify the timing and nature of these interventions (unilateral, coordinated or ERM II-related), their total amount and direction, as well as provide a breakdown per currency. A related press release is available on the ECB’s website.Monetary policy

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ECB enhances reporting on FX interventions

18 days ago

PRESS RELEASE27 September 2019The exchange rate is not a policy target for the ECBECB so far intervened in the foreign exchange market in 2000 and 2011ECB to start publishing FX intervention data on quarterly basis as of April 2020New reporting approach will enhance communication and transparencyThe Governing Council of the European Central Bank (ECB) has decided to publish additional data on the ECB’s foreign exchange interventions (FXI). The aim is to enhance communication and transparency in line with its accountability practices. The ECB has so far intervened in the foreign exchange market in 2000 and 2011. The last FXI was a coordinated intervention by the Group of Seven most advanced economies to weaken the Japanese yen after a major earthquake. As of April 2020 the ECB will start

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Philip R. Lane: Interview with Handelsblatt

19 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Jan Mallien and Frank Wiebe on 24 September 201926 September 2019Mr Lane, the ECB launched a big monetary policy package in September. Was that really necessary?In my view, it wasn’t such a large package. We reduced the interest rate that banks are charged on their deposits at the ECB by 0.1 percentage points to -0.5%, and we adjusted our forward guidance on the outlook for interest rates. That’s not dramatic. And we decided to conduct net asset purchases at a rate of €20 billion per month, which is much less than the peak of €80 billion a month that we had in the past.What made an impression on many observers was the fact that these measures are not time-limited. Will we have to live with

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Mario Draghi: Macroprudential policy in Europe

19 days ago

SPEECH Welcome remarks by Mario Draghi, President of the ECB and Chair of the European Systemic Risk Board, at the fourth annual conference of the ESRBFrankfurt am Main, 26 September 2019It is my pleasure to welcome you to the fourth annual conference of the European Systemic Risk Board (ESRB). Since this is the last time I will open this conference as Chair of the ESRB, I wanted to reflect on the development of macroprudential policy over the course of the past eight years. In that time it has evolved from an idea that mostly existed on paper into policy instruments that have been widely implemented. Europe is now better placed to prevent or mitigate risks to financial stability than it was in the run-up to the global financial crisis.Yet there is still unfinished business: analytical

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Sabine Lautenschläger resigns from ECB Board

20 days ago

PRESS RELEASE25 September 2019Today, Sabine Lautenschläger, Member of the Executive Board and Governing Council of the European Central Bank (ECB), informed President Mario Draghi that she will resign from her position on 31 October 2019, prior to the end of her term of office. Ms Lautenschläger has been a Member of the Executive Board and Governing Council since 27 January 2014 as well as serving a full term in office as the Vice-Chair of the Supervisory Board of the Single Supervisory Mechanism (SSM). President Mario Draghi thanked her for her instrumental role in helping set up and steer Europe-wide banking supervision, a key pillar of banking union, as well as her unwavering commitment to Europe. For media queries, please contact Philippe Rispal, tel.: +49 69 1344 5482.

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Benoît Cœuré: Introductory remarks

20 days ago

SPEECHHearing of Benoît Cœuré[1], Member of the Executive Board of the ECB, organised by the Committee on the Digital Agenda on the topic of “Digital currencies, focusing on Libra”, Deutscher BundestagBerlin, 25 September 2019It is my pleasure to join you today to discuss the topic of digital currencies, focusing on Libra. Payment systems have always been at the heart of finance but they have attracted heightened interest recently. Innovation is rampant, and new proposed solutions are testimony to the pervasive speed and scope of recent technological advances and their implications for our everyday lives. The traditional bank-based payments ecosystem is being disrupted from below by tech start-ups and from above by well-established big techs – firms that have a large digital footprint but

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Luis de Guindos: Concluding remarks

21 days ago

SPEECHSpeech by Luis de Guindos, Vice-President of the ECB, at the ECB conference “Inflation in a changing economic environment”Frankfurt am Main, 24 September 2019IntroductionYou have now been discussing issues related to inflation for two days, covering a wide variety of topics. Conferences of this kind are very helpful to us as central bankers, as they enable us to advance our thinking about policy-relevant questions, particularly if they are related to our core mandate. In concluding this conference, let me say a few words about economic slack in the euro area and the wage-inflation pass-through. I think these are interesting topics at the moment, because, as you know, euro area inflation has been persistently low for several years, and more recently we have observed some decoupling of

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Luis de Guindos: Measures to support monetary policy transmission through banks

21 days ago

SPEECHWelcome address by Luis de Guindos, Vice-President of the ECB, to the Money Market Contact Group Frankfurt am Main, 24 September 2019In its most recent policy meeting, the ECB’s Governing Council decided on a comprehensive easing package because the downward revisions in the projected inflation path warranted a vigorous policy response.The easing package comprised five measures: lowering the deposit facility rate, strengthening the forward guidance on the likely path of policy rates, restarting the net asset purchases within the asset purchase programme, changing the terms of the third series of targeted longer-term refinancing operations (TLTRO III) and introducing a two-tier system for reserve remuneration. We believe that the measures announced last week complement each other and

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Mario Draghi: Hearing at the Committee on Economic and Monetary Affairs of the European Parliament

22 days ago

SPEECHIntroductory Statement by Mario Draghi, President of the ECB, at the ECON committee of the European ParliamentBrussels, 23 September 2019IntroductionMadam Chair,Honourable members of the Economic and Monetary Affairs Committee,Ladies and gentlemen,I would like to start by congratulating all of you on your election, and you, Madam Chair, on your recent appointment as Chair of this Committee. It is a pleasure to appear before this Committee in this new legislative term and before my term as ECB President comes to an end.The legitimacy of the ECB’s independence, as enshrined in the EU Treaties, crucially relies on our accountability. And the Treaties have conferred this Parliament with a central role in holding the ECB accountable. Hearings before this Committee play an essential role

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Philip R. Lane: Q&A with Bloomberg

26 days ago

Q&A with Philip R. Lane, Member of the Executive Board of the ECB, on 16 September 2019 at Bloomberg in LondonThe following is a transcript of an on stage question and answer following Mr Lane’s speech, Reflections on monetary policy. I did take the precaution of inviting mainly economists today, so I think they will have found your speech very exciting and interesting. Whether a broader cross-section of London would have had the same reaction, we don’t know, but it doesn’t matter. You’ve often said, particularly in times of unconventional policies, how important communications are for monetary policy. A lot of the communications that we’ve been talking about over the last few days, since the package was announced, have been negative communications from members of the Council who have made

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Benoît Cœuré: Digital challenges to the international monetary and financial system

28 days ago

SPEECHPanel remarks by Benoît Cœuré, Member of the Executive Board of the ECB, at the Banque centrale du Luxembourg-Toulouse School of Economics conference on “The Future of the International Monetary System”, Luxembourg, 17 September 2019Luxembourg, 17 September 2019When[1] the euro was created 20 years ago it was hailed as one of the most important turning points in the history of the international monetary system since the demise of the Bretton Woods system.[2] Many observers saw the euro as a natural contender to rival the supremacy of the US dollar in the global monetary and financial system. After all, the euro area was (and remains) the world’s largest trading bloc.[3]The remarkable rise of China in the global economy, its expanding role in international trade, and the inclusion of

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Philip R. Lane: Reflections on monetary policy

29 days ago

Keynote speech by Philip R. Lane, Member of the Executive Board of the ECB, at Bloomberg, London, 16 September 2019I will divide this speech into two parts. First, I wish to review the current economic and financial environment. Second, I will discuss the monetary policy decisions taken by the Governing Council in last week’s meeting.[1]Incoming information is signalling a more extended slowdown in euro area growth dynamics than previously expected. As I will discuss, this slowdown is mainly due to external developments. While domestic demand is resilient, persistent uncertainties related to protectionist policies and geopolitical factors are taking a toll on economic sentiment and are clearly weighing on the euro area manufacturing sector.On the international front, the latest survey data

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ECB provides additional details on purchases of assets with yields below the deposit facility rate

September 12, 2019

PRESS RELEASE12 September 2019ECB extends possibility of buying assets with yields below deposit facility rate to all private sector purchase programmesDecision takes immediate effectExtension facilitates smooth implementation of asset purchase programmeThe Governing Council of the European Central Bank (ECB) today decided to extend the possibility of buying assets with yields below the interest rate on the deposit facility, to the extent necessary, under all parts of its asset purchase programme (APP).The Governing Council had previously decided, in January 2017, that purchases of assets with yields below the deposit facility rate could take place under the public sector purchase programme (PSPP). Today’s decision extends this possibility to the private sector parts of the APP, namely the

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ECB announces changes to new targeted longer-term refinancing operations (TLTRO III)

September 12, 2019

PRESS RELEASE12 September 2019Interest rate on TLTRO III operations to be reducedRate can be as low as the average interest rate on deposit facilityMaturity extended to three years, from two years, with repayment option after two yearsThe Governing Council of the European Central Bank (ECB) today decided to modify some of the key parameters of the third series of targeted longer-term refinancing operations (TLTRO III) to preserve favourable bank lending conditions, ensure the smooth functioning of the monetary policy transmission mechanism and further support the accommodative stance of monetary policy.First, in terms of the pricing of TLTRO III, the previously announced 10-basis point spread above the average interest rate of the Eurosystem’s main refinancing operations (MROs) and, for

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

September 12, 2019

Mario Draghi, President of the ECB,Luis de Guindos, Vice-President of the ECB,Frankfurt am Main, 12 September 2019INTRODUCTORY STATEMENTJump 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.Based on our regular economic and monetary analyses, we have conducted a thorough assessment of the economic and inflation outlook, also taking into account the latest staff macroeconomic projections for the euro area. As a result, the Governing Council took the following decisions in pursuit of its price stability objective.First, as regards the key ECB interest rates, we decided to lower the interest rate on the deposit

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ECB introduces two-tier system for remunerating excess liquidity holdings

September 12, 2019

PRESS RELEASE12 September 2019Two-tier system aims to support bank-based transmission of monetary policy Part of excess liquidity holdings exempt from negative deposit facility rateScheme to apply as of seventh maintenance period starting on 30 October 2019Exempt tier will be remunerated at the annual rate of 0%The Governing Council of the European Central Bank (ECB) today decided to introduce a two-tier system for reserve remuneration, which exempts part of credit institutions’ excess liquidity holdings (i.e. reserve holdings in excess of minimum reserve requirements) from negative remuneration at the rate applicable on the deposit facility. This decision aims to support the bank-based transmission of monetary policy, while preserving the positive contribution of negative rates to the

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Monetary policy decisions

September 12, 2019

PRESS RELEASE12 September 2019At today’s meeting the Governing Council of the ECB took the following monetary policy decisions:(1) The interest rate on the deposit facility will be decreased by 10 basis points to -0.50%. The interest rate on the main refinancing operations and the rate on the marginal lending facility will remain unchanged at their current levels of 0.00% and 0.25% respectively. The Governing Council now 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) Net purchases will be restarted under the Governing Council’s asset

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Luis de Guindos: Growth and competitiveness in the euro area

September 7, 2019

Panel contribution by Luis de Guindos, Vice-President of the ECB, at The European House-Ambrosetti Forum, Cernobbio, 7 September 2019Growth, investment and competitiveness are topics of utmost relevance for monetary policy. Investment trends and productivity growth are key determinants of the potential growth rate of the economy. Measurement challenges aside, the resulting output gap – the deviation of actual economic activity from its potential – is a key driver of inflation over the short and medium term. Today I will focus on the factors behind weak investment and productivity, on the remaining barriers to competition and on the importance of deepening Economic and Monetary Union (EMU) and completing the capital markets union (CMU) to enhance the attractiveness of the euro area.Let me

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Luis de Guindos: The evolution of stress-testing in Europe

September 4, 2019

Keynote speech by Luis de Guindos, Vice-President of the ECB, at the annual US-EU Symposium organised by the Program on International Financial Systems, Frankfurt, 4 September 2019IntroductionDuring the financial crisis, stress tests were primarily used to identify capital shortfalls in the banking sector and to enhance market discipline. This was achieved through the publication of consistent and granular data on a bank‐by‐bank basis, with banks judged to have either “passed” or “failed” the test.Since the crisis, the way in which stress tests are used has evolved, both in Europe and abroad. They have become a key part of the supervisory and financial stability toolkit for assessing risk profiles and performance under adverse macroeconomic conditions. In the United States, the regular

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