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

6 days ago

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

7 days ago

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

7 days ago

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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Yves Mersch: The ECB’s monetary policy amid the pandemic

9 days ago

SPEECHIntroductory remarks by Yves Mersch, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the MNI Connect Roundtable19 October 2020I will provide a brief overview of our monetary policy amid the coronavirus (COVID-19) pandemic shock and against the background of our current assessment of the macroeconomic outlook.[1]The economic outlookWhile euro area economic activity has rebounded strongly from the unprecedented collapse earlier this year, the recovery remains incomplete and prone to setbacks. We have seen a clear improvement across economic indicators, especially at the beginning of the summer. As strict lockdown measures were relaxed and economies reopened, the recovery turned out to be slightly stronger than we expected. However, these

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Christine Lagarde: Interview with Le Monde

9 days ago

INTERVIEWInterview with Christine Lagarde, President of the ECB, conducted by Marie Charrel and Eric Albert and published on 19 October 202019 October 2020With the pandemic getting worse, many countries are introducing new restrictions. Against this backdrop, what are your fears for the European economy?The second wave of the pandemic in Europe, notably in France, and the resulting new restrictions are adding to the uncertainty and weighing on the recovery. Since the rebound we saw over the summer, the recovery has been uneven, uncertain and incomplete and now risks losing momentum. We will keep a close watch on indicators throughout the autumn. Our central scenario foresees euro area GDP declining by an average of 8% in 2020 and assumes partial and localised containment measures. If the

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Christine Lagarde: Remarks at the G30 International Banking Seminar

10 days ago

SPEECH Contribution by Christine Lagarde, President of the ECB, during the session “Rebuilding and Sustaining Growth”Frankfurt am Main, 18 October 2020The first phase of the coronavirus (COVID-19) crisis was an extraordinary challenge for public policy, but policy responses around the world converged fairly quickly. Governments everywhere acted swiftly to offset the loss of private sector income through massive fiscal interventions. Central banks stabilised financial markets and financing conditions, and – within their respective mandates – worked hand-in-hand with fiscal authorities to absorb the shock. The results were remarkable and averted what would have been a catastrophic depression. But today the challenges facing economic policy are broader. The COVID-19 recession simultaneously

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Fabio Panetta: Interview with Kathimerini

11 days ago

INTERVIEWInterview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Eirini Chrysolora and published on 17 October 202017 October 2020The pandemic emergency purchase programme (PEPP) has so far secured low interest rate borrowing, especially for countries in need such as Italy and Greece. What do you expect to happen regarding the bonds of these countries when the programme ends? Are you worried that they will fall off a cliff? The pandemic has driven the euro area economy into its deepest economic downturn. The GDP contraction hit double digits in the second quarter, with disinflationary effects. The ECB has therefore taken decisive measures to protect productive capacity and stabilise markets, providing favourable financing conditions for all economic sectors

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Christine Lagarde: IMFC Statement

13 days ago

SPEECHStatement by Christine Lagarde, President of the ECB, at the forty-second meeting of the International Monetary and Financial CommitteeVirtual IMF Annual Meetings, 15 October 2020The coronavirus (COVID-19) pandemic continues to be a truly global challenge. Countries all around the world are facing severe human and economic consequences. In the euro area, we have taken decisive action to mitigate the impact of the crisis, both at the national and European levels. However, a global challenge of this nature also requires global solutions and strong international cooperation. At the global level, it will be crucial not to withdraw the policy support prematurely, including on both the monetary and fiscal sides, as reducing support too soon would risk delaying the economic rebound. At the

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Fabio Panetta: A digital euro for the digital era

16 days ago

SPEECH Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the ECON Committee of the European ParliamentFrankfurt am Main, 12 October 2020Madame Chair, honourable members of the Committee on Economic and Monetary Affairs,Thank you for inviting me to present the Eurosystem report on a digital euro.[1]The quest to ensure that means of payment are fit for purpose has characterised economic history. In the provision of money by the sovereign, Europe can boast of a primacy dating back to ancient Greece[2] and the Roman era.[3] The search for sound money continued in the “dark” years of the High Middle Ages, despite the resumption of bartering; in the eighth century the monetary reform of Charlemagne spread out in many European countries.[4]The evolution of

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Isabel Schnabel: Pulling together: fiscal and monetary policies in a low interest rate environment

16 days ago

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Interparliamentary Conference on Stability, Economic Coordination and Governance in the European UnionFrankfurt am Main, 12 October 2020The title of this morning’s session is intriguing in many ways: it speaks of a “new partnership” between monetary and fiscal policy and of the “requested” fiscal support.The title suggests that the environment in which monetary policy operates may have changed in recent years – even well before the outbreak of the pandemic – and that this may have altered the way monetary and fiscal policies interact to deliver stable prices and sustainable growth.And indeed, a few key numbers summarise how radically our world has changed. Over the past two decades, the ECB’s main refinancing

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Philip R. Lane: Interview with Wall Street Journal

17 days ago

INTERVIEWInterview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Tom Fairless on 8 October11 October 2020What’s your latest thinking on the economic outlook for the eurozone? Do you see the risk of a double-dip recession?The usual language we use for how the economy is performing is not so helpful this year. When the economy was locked down in March and April there was a really big drop in activity, but it was an enforced drop. We published on 1 May a set of simulations, and broadly the baseline there has been working. The baseline had a big drop in the second quarter and an elastic bounceback in the third quarter, and that has worked out. The narrative was that the fourth quarter would not be a dip, but it would be a slowdown. What is true is that the next

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Isabel Schnabel: The ECB’s independence in times of mounting public debt

18 days ago

INTERVIEWContribution by Isabel Schnabel, Member of the Executive Board of the ECB, Frankfurter Allgemeine Zeitung10 October 2020The pandemic is driving up government debt throughout the world. In the euro area, it is set to exceed 100% of GDP, a level that is, however, still below that of many advanced economies. In Germany especially, many observers are concerned about this development. They consider it a threat to the independence of the European Central Bank (ECB), fearing that “fiscal dominance” may induce it to deviate from its monetary policy objectives, endangering price stability. The purchases of sovereign bonds, which began in 2015 and were stepped up amid the pandemic, are sometimes even described as monetary financing, which is prohibited under the European Treaties.These

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Meeting of 9-10 September 2020

20 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, 9-10 September 20201. Review of financial, economic and monetary developments and policy optionsFinancial market developmentsMs Schnabel reviewed the financial market developments since the Governing Council’s previous monetary policy meeting on 15-16 July 2020.The functioning of euro area financial markets had, by and large, been restored. Stress symptoms had largely dissipated and liquidity had returned to the market. The Composite Indicator of Systemic Stress (CISS) remained only marginally higher than before the coronavirus (COVID-19) period, with the difference primarily being driven by still elevated volatility, particularly in stock

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Yves Mersch: European economic governance: early lessons from the crisis

20 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 Conference “The Werner Report, 50 Years on”, organised by the Luxembourg Centre for Contemporary and Digital History in cooperation with EUI FlorenceVirtual, 8 October 2020IntroductionIn my remarks today, I will focus on three elements which I believe could outlast the EU crisis response – and could perhaps form Pierre Werner’s legacy.A substantial crisis response at European and national level with a threefold legacyEurope’s historic response to today’s unprecedented crisis not only coincides with the 50th anniversary of the Werner Report. It also puts the report’s economic reasoning into practice.In Werner’s view, monetary integration had to be

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Christine Lagarde: Written interview with Harvard International Review

21 days ago

INTERVIEWInterview with Christine Lagarde, President of the ECB7 October 2020In normal times, the goal of any central bank is to keep the boat steady; suffice it to say, these are not normal times. How is the role of the ECB changing?Keeping the boat steady is even more important in turbulent waters. While this may require some extraordinary manoeuvres, one should not lose sight of the course to reach the destination. This has been very much our role. Faced with the severe economic consequences of the pandemic, we have taken a number of extraordinary measures to support the economy and to help euro area citizens through this extremely challenging time. Failing to do so would have blown us off course in the delivery of our mandate to maintain price stability.The key pillars of our crisis

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ECB publishes summary of feedback on public consultation on compounded €STR rates

21 days ago

PRESS RELEASE7 October 2020Consultation received 44 repliesRespondents supportive of publication of compounded €STR rates by the ECBThe public consultation launched by the ECB on the possible publication of backward-looking compounded rates received a significant number of replies coming from a broad range of market participants across different countries. The replies were supportive of the main parameters and elements of the envisaged methodology, and contained some suggestions, which the ECB will consider when finalising the methodology.For more details, please refer to the summary.For media queries, please contact William Lelieveldt, tel.: +49 69 1344 7316.Notes

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ECB appoints Wolfgang Proissl as Director General Communications

21 days ago

PRESS RELEASE7 October 2020Wolfgang Proissl to start on 1 January 2021The Executive Board of the European Central Bank (ECB) has appointed Wolfgang Proissl to the position of Director General Communications (DG-C) as of 1 January 2021.Mr Proissl, 54, is currently Head of Communication and Chief Spokesperson at the European Stability Mechanism (ESM), a position he has held since October 2012. He previously held positions at the Financial Times Deutschland as Chief Correspondent in Frankfurt, reporting on monetary policy and international finance, Bureau Chief in Brussels and Foreign Editor in Berlin. Prior to that, he was Paris economic correspondent for Die Zeit. Mr Proissl holds a master’s degree in economics from Cologne University and a degree in economic and political journalism from

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Philip R. Lane: The ECB’s monetary policy in the pandemic: meeting the challenge

22 days ago

SPEECHSpeech by Philip R. Lane, Member of the Executive Board of the ECB, at the 62nd NABE Annual Meeting “Global Reset? Economics, Business, and Policy in the Pandemic”6 October 2020I will provide a brief assessment of the macroeconomic outlook, discuss the ECB’s monetary policy response to the pandemic crisis and explain our current monetary policy challenge.[1]The macroeconomic outlookWe expect about half of the cumulative decline in output in the first half of the year to have been reversed during the third quarter. Compared with the trough, this initial recovery phase is visible across a wide range of economic indicators.[2]That said, the euro area economy is still operating far below its pre-pandemic level. While this in part can be attributed to ongoing supply-side interruptions,

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ECB intensifies its work on a digital euro

26 days ago

PRESS RELEASE2 October 2020Publication of Eurosystem High-Level Task Force report on digital euro Eurosystem needs to be ready for possible future decision to introduce digital euroPublic consultation and experimentation to be launched The European Central Bank (ECB) today published a comprehensive report on the possible issuance of a digital euro, prepared by the Eurosystem High-Level Task Force on central bank digital currency (CBDC) and approved by the Governing Council. A digital euro would be an electronic form of central bank money accessible to all citizens and firms – like banknotes, but in a digital form – to make their daily payments in a fast, easy and secure way. It would complement cash, not replace it. The Eurosystem will continue to issue cash in any case.“The euro belongs

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Luis de Guindos: Interview with Market News International

27 days ago

INTERVIEWInterview with Luis de Guindos, Vice-President of the ECB, conducted by Luke Heighton on 29 September 2020 and published on 1 October 2020 1 October 2020The September 2020 ECB staff macroeconomic projections appear to have added weight to the ECB’s baseline scenario. How do you interpret the most recent growth and inflation data? Is there a danger that they could be viewed too positively, or too negatively?First of all, it’s implicit in our projections that for the rest of this year the inflation rate is going to be hovering around zero to negative, partly because of the pandemic and the evolution of the crisis, and partly because of VAT rebates – not only in Germany, but also in other countries like Ireland. These are ephemeral effects, one-offs. For 2021, the base effect is

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ECB publishes statement of compliance of €STR with IOSCO Principles for Financial Benchmarks

28 days ago

PRESS RELEASE30 September 2020Statement explaining how ECB administers €STRCompliance of the ECB with IOSCO Principles, and therefore with international best practice, in its administration of €STRIndependent assurance by external auditorThe European Central Bank (ECB) today published its statement of compliance with the Principles for Financial Benchmarks developed by the International Organization of Securities Commissions (IOSCO). This statement shows how the ECB complies with these principles, and therefore with international best practice, in its administration of the €STR. The statement has been independently assured by the auditing firm PricewaterhouseCoopers.The ECB has been the administrator of the euro short-term rate (€STR) since it went live on 2 October 2019. The ECB’s

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Christine Lagarde: The monetary policy strategy review: some preliminary considerations

28 days ago

SPEECHSpeech by Christine Lagarde, President of the ECB, at the “ECB and Its Watchers XXI” conferenceFrankfurt am Main, 30 September 2020Thank you for inviting me to address this conference. This morning, I would like to speak to you about the ECB’s strategy review, the reasons we are conducting it, and our expectations as a result of it. Since 2003, when we last conducted a strategy review, the euro area and the world economy have undergone profound changes. The consensus that has governed monetary policy worldwide has been challenged on a number of fronts. Most importantly, the last decade has been defined by a persistent decline in inflation among advanced economies. In the euro area, annual inflation averaged 2.3% from 1999 to the eve of the great financial crisis in August 2008, but

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ECB amends monetary policy implementation guidelines

September 28, 2020

PRESS RELEASE28 September 2020ECB phasing out secured marketable assets other than asset-backed securities, legislative covered bonds and multi-cédulas as collateralApplication process and acceptance criteria for external credit assessment institutions clarifiedAmendments to treatment of breaches with respect to own fund requirements and reporting on capital ratiosThe European Central Bank (ECB) has today published amendments to its guidelines on the implementation of monetary policy in the Eurosystem, applicable from 1 January 2021.The amended guidelines implement a decision taken by the Governing Council on 13 December 2019 whereby secured marketable assets other than asset-backed securities and covered bonds would no longer be accepted as Eurosystem collateral. Under the amended

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

September 28, 2020

SPEECHIntroductory statement by Christine Lagarde, President of the ECB, at the ECON Committee of the European Parliament (by videoconference)Frankfurt am Main, 28 September 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 and to have a frank and timely discussion about the ECB’s monetary policy, as befits the topics you have chosen for this hearing. After a few words on the euro area economic outlook, I will focus my remarks today on the ECB’s monetary policy and in particular on the role of asset purchases, before sharing some reflections on the ECB’s accountability arrangements.The euro area economic outlookThe impact of the coronavirus (COVID-19) pandemic is

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Isabel Schnabel: Women are central, not just in central banks

September 28, 2020

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the Annual Meeting 2020 of the Verein für SocialpolitikFrankfurt am Main, 28 September 2020Economics is one of the fields in which women are underrepresented.[1] This has been acknowledged for some time and numerous measures have been implemented to improve the situation. Nevertheless, the substantial gender imbalance has proven to be very persistent. Since central banks recruit mostly economics graduates, a similar imbalance is apparent in their staff numbers – something that the European Central Bank (ECB) is determined to change.In my remarks today, I will start by summarising some of the underlying causes that contribute to the underrepresentation of female economists overall. I will argue that this imbalance

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Isabel Schnabel: When markets fail – the need for collective action in tackling climate change

September 28, 2020

SPEECHSpeech by Isabel Schnabel, Member of the Executive Board of the ECB, at the European Sustainable Finance Summit, Frankfurt am Main, 28 September 2020Frankfurt am Main, 28 September 2020There has been a growing debate about the role that monetary policy should play in addressing the risks of climate change. The coronavirus (COVID-19) pandemic has intensified this debate in several ways.[1]It has laid bare how large global shocks can affect price stability and hence the conduct of monetary policy. The pandemic has also testified to the vulnerability of financial markets to tail events – a risk that many observers see in the prevailing pricing, or mispricing, of climate risks.In my remarks this afternoon, I will argue that, despite growing efforts, policies to mitigate the adverse and

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

September 25, 2020

August-September 202025 September 2020Market operationsRepo line arrangements with the central banks of the Republic of North Macedonia and the Republic of San MarinoOn 18 August 2020 the ECB announced that the Governing Council had approved the setting-up of two repo line arrangements to provide euro liquidity to, respectively, the National Bank of the Republic of North Macedonia and the Central Bank of the Republic of San Marino. This was to address possible euro liquidity needs in the presence of market dysfunctions owing to the coronavirus (COVID-19) shock. The related press releases are available on the ECB’s website. Reduced frequency of seven-day US dollar liquidity-providing operations On 20 August 2020 the Governing Council decided to change the frequency of US dollar

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