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Speech

Towards a green capital markets union

The green transition offers a unique opportunity to build a truly European capital market that transcends national borders, says President Christine Lagarde. A green capital markets union could also help address some of the wider challenges the European economy faces today.

Speech

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Civil war declaration: On April 14th and 15th, 2012 Federal Republic of Germany "_urkenstaats"s parliament, Deutscher Bundestag, received a antifiscal written civil war declaration by Federal Republic of Germany "Rechtsstaat"s electronic resistance for human rights even though the "Widerstandsfall" according to article 20 paragraph 4 of the constitution, the "Grundgesetz", had been already declared in the years 2001-03. more

ECONOMIC BULLETIN 6 May 2021

Economic Bulletin out now

This publication presents the economic and monetary information which forms the basis for the Governing Council’s policy decisions.

It is released eight times a year, two weeks after each monetary policy meeting.

Economic Bulletin Issue 3, 2021
INTERVIEW 3 May 2021

Bridging the gaps

The impact of the pandemic varies across the euro area, says Vice-President Luis de Guindos. That’s why NextGenerationEU is so important: more funds are earmarked for the countries hardest hit by the pandemic.

Interview
YOUTH INITIATIVES 29 April 2021

Join our #EuropeDay quiz competition!

Test your knowledge of European topics in our #EuropeDay competition and win an iPad. Just download the QuizDuel app and complete the quiz – the contest runs from 3 May to 23 May.

More on the quiz
6 May 2021
Speech by Christine Lagarde, President of the ECB, at the European Commission’s high-level conference on the proposal for a Corporate Sustainability Reporting Directive, 6 May 2021
5 May 2021
Speech by Philip R. Lane, Member of the Executive Board of the ECB, at the OMFIF virtual panel
29 April 2021
Keynote speech by Frank Elderson, Vice-Chair of the Supervisory Board and Member of the Executive Board of the ECB, at the conference on “The Role of Banks in Greening Our Economies” organised by the European Bank for Reconstruction and Development and Hrvatska narodna banka
26 April 2021
Speech by Philip R. Lane, Member of the Executive Board of the ECB, at the European Statistical Forum (virtual)
26 April 2021
Welcome address by Fabio Panetta, Member of the Executive Board of the ECB, at the joint BIS, BoE, ECB and IMF conference on “Spillovers in a “post-pandemic, low-for-long” world”
3 May 2021
Interview with Luis de Guindos, conducted by Tonia Mastrobuoni on 27 April 2021
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29 April 2021
Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Gabriel Mellqvist on 29 April 2021
28 April 2021
Interview on Twitter with Isabel Schnabel, Member of the Executive Board of the ECB, conducted and published on 28 April 2021
12 April 2021
Interview with Christine Lagarde, President of the ECB, conducted by Sara Eisen on 9 April 2021 and broadcast on the same day
11 April 2021
Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Luis Doncel and published on 11 April 2021
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1 April 2021
Blog post by Philip R. Lane, Member of the Executive Board of the ECB
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Summary
The recent volatility of inflation can largely be attributed to the nature of the pandemic shock, writes Chief Economist Philip R. Lane. The increase in inflation during early 2021 does not constitute the basis for a sustained shift in inflation dynamics.
25 March 2021
Blog post by Fabio Panetta, Member of the Executive Board of the ECB, and Ulrich Bindseil, ECB Director General Market Infrastructure and Payments
English
OTHER LANGUAGES (3) +
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At the ECB we are committed to understanding people’s needs and ensuring the digital euro would be widely accepted, writes Executive Board member Fabio Panetta with Ulrich Bindseil in The ECB Blog.
22 March 2021
Blog post by Christine Lagarde, President of the ECB
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Summary
Our pandemic emergency purchase programme (PEPP) has provided crucial support to euro area citizens since its launch a year ago, writes President Christine Lagarde in The ECB Blog. The PEPP has been, and remains, at the core of our pandemic policy response.
18 March 2021
Blog post by Luis de Guindos, Vice-President of the ECB
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Summary
The damage caused by more frequent and severe natural disasters far exceeds the costs of transitioning to a greener economy, writes Vice-President Luis de Guindos in his ECB Blog post on our first climate stress test for banks and companies.
8 March 2021
Blog post by Christine Lagarde, President of the ECB
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Summary
One year into the pandemic, we can clearly see that the social and economic impact of the virus is particularly hard for women, writes President Christine Lagarde. In response we must choose to challenge women’s roles at home, at work and in our society.
7 May 2021
WORKING PAPER SERIES - No. 2546
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Abstract
We revisit the effects of globalisation over the past 50 years in a large sample of advanced and emerging countries. We use accessions to \Globalisation Clubs" (WTO, OECD, EU), financial liberalisation and an instrument for trade openness to study the trade-off between efficiency (proxied by real GDP per capita and TFP) and equity (proxied by the labour share of income and the Gini index of inequality). We find that (i) most of our episodes lead to an increase in trade openness (ii) effects on GDP per capita are mostly positive with some interesting exceptions and (iii) there is little evidence that globalisation shocks lead to more inequality.
JEL Code
F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
7 May 2021
WORKING PAPER SERIES - No. 2545
Details
Abstract
We build a three-period model to investigate market failures in the market-based financial system. Institutional investors (IIs), such as insurance companies and pension funds, have liabilities offering guaranteed returns and operate under a risk-sensitive solvency constraint. They seek to allocate funds to asset managers (AMs) that provide diversification when investing in risky assets. At the interim date, AMs that run investment funds face investor redemptions and liquidate risky assets and/or deplete cash holdings, if available. Dealer banks can purchase risky assets, thus providing market liquidity. The latter ultimately determines equilibrium allocations. In the competitive equilibrium, AMs suffer from a pecuniary externality and hold inefficiently low amounts of cash. Asset fire sales increase the overall cost of meeting redemptions and depress risk-adjusted returns delivered by AMs to IIs, forcing the latter to de-risk. We show that a macroprudential approach to (i) the liquidity regulation of AMs and (ii) the solvency regulation of IIs can improve upon the competitive equilibrium allocations.
JEL Code
D62 : Microeconomics→Welfare Economics→Externalities
G01 : Financial Economics→General→Financial Crises
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G38 : Financial Economics→Corporate Finance and Governance→Government Policy and Regulation
6 May 2021
ECONOMIC BULLETIN
6 May 2021
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 3, 2021
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Abstract
This box reviews the factors behind the 11-percentage point swing in energy inflation between December 2020 and March 2021, with a particular focus on oil prices, base effects and the impact of indirect taxation. Base effects linked to the collapse of oil prices at the beginning of 2020 pushed up energy inflation by around 5 percentage points between December 2020 and March 2021, and this contribution can be expected to increase substantially further in April. The impact of the marked increase in oil prices since November 2020 has come on top of this. However, the strengthening of energy inflation in early 2021 has reflected not only oil price developments but also changes in taxes and other surcharges – including environmentally motivated measures such as the introduction of carbon emission certificates. Overall, energy inflation plays a prominent role in the temporary rise in overall HICP inflation projected for 2021 and its reduction in early 2022.
JEL Code
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
Q4 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy
E37 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Forecasting and Simulation: Models and Applications
H2 : Public Economics→Taxation, Subsidies, and Revenue
H23 : Public Economics→Taxation, Subsidies, and Revenue→Externalities, Redistributive Effects, Environmental Taxes and Subsidies
6 May 2021
OTHER PUBLICATION
5 May 2021
OTHER PUBLICATION
5 May 2021
OTHER PUBLICATION
5 May 2021
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 3, 2021
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Abstract
We show how heterogeneous expectations across agents can change the macroeconomic outcomes of an increase in long-term inflation expectations. A broad-based expectation of higher longer-term inflation can be expected to lift the short to medium-term inflation outlook and have an expansionary effect on economic activity. If the financial markets are the only segment of the economy repricing higher longer-term inflation expectations, the associated tightening of financing conditions would hamper firms’ and households’ expenditure decisions and prevent any price pressures from building up.
JEL Code
E1 : Macroeconomics and Monetary Economics→General Aggregative Models
E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
I1 : Health, Education, and Welfare→Health
5 May 2021
ECONOMIC BULLETIN - ARTICLE
Economic Bulletin Issue 3, 2021
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Abstract
The experience of the last ten years shows that the composition of government debt plays an important role in several analytical and policy domains such as public debt management, financial stability and sovereign debt sustainability. Against this background, the article provides an overview of the evolution of the structure of public debt by holder in euro area countries and explores in more detail the structure of domestically held government debt with a special focus on households. In the first decade of EMU, the share of foreign holdings of euro area government debt, including both creditors from other euro area countries and creditors from outside the euro area, has been increasing owing to deepening financial integration. Following the global financial crisis and the euro area sovereign debt crisis, the share of domestic holdings increased again, first driven by holdings of banks and other financial corporations and, since 2015, mainly by central banks’ holdings. The role of households’ direct holdings of government debt is relatively limited at around 2% of total government debt in the euro area, although it is more sizeable in several euro area countries and in some other advanced economies. However, considering indirect holdings through investment funds, insurance corporations and pension funds, the share of households in financing government debt is more significant, albeit slightly decreasing over time, and amounted to almost 16% in the euro area in 2020.
JEL Code
H6 : Public Economics→National Budget, Deficit, and Debt
H1 : Public Economics→Structure and Scope of Government
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
4 May 2021
WORKING PAPER SERIES - No. 2544
Details
Abstract
We develop a horizontal R&D growth model that allows us to investigate the different channels through which financial reforms affect R&D investment and patent activity. First, a “micro” reform that abolishes barriers to entry in the banking sector produces a straightforward result: a decrease in lending rates which stimulates R&D investment and economic growth. Second, a “macro” reform that removes restrictions on banks’ reserves and credit controls. While this reform increases liquidity, it also increases the risk of default, potentially raising the cost of borrowing. This we dub the “reserves paradox” – this makes banks offset the rise in the default rate with a higher spread between loans and deposit rates. Thus our model suggests that whilst micro reforms boost innovation, macro reforms may appear negative. We test and find empirical support for these propositions using a sample of 21 OECD countries.
JEL Code
G2 : Financial Economics→Financial Institutions and Services
C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
O43 : Economic Development, Technological Change, and Growth→Economic Growth and Aggregate Productivity→Institutions and Growth

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Marginal lending facility 0.25 %
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