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MONETARY POLICY

Our monetary policy statement at a glance

What are the main points in our new monetary policy statement and what mattered to us in our decision? Our visual statement explains this in short and easy-to-understand language.

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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

SPEECH 12 April 2024

Policies robust to climate and nature crises

Failure to meet the Paris climate goals poses economic challenges that have an impact on central banks’ work, says Executive Board member Frank Elderson. To avoid long-term policy mistakes, economic policymakers must address the resulting structural changes and reduce uncertainty.

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MONETARY POLICY

Latest ECB press conference

President Christine Lagarde and Vice-President Luis de Guindos explained the Governing Council’s latest monetary policy decisions and answered questions from journalists at a press conference.

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EVENT 8 April 2024

Media seminar: apply by 3 May!

If you work for the media and wish to attend our seminar on 6-7 June, please send an email to media@ecb.europa.eu. The seminar is an opportunity for you to discuss on background monetary policy and banking supervision topics, and to meet policymakers at the ECB

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12 April 2024
GOVERNING COUNCIL DECISIONS - OTHER DECISIONS
12 April 2024
PRESS RELEASE
12 April 2024
PRESS RELEASE
11 April 2024
MONETARY POLICY DECISION
9 April 2024
WEEKLY FINANCIAL STATEMENT
Annexes
9 April 2024
WEEKLY FINANCIAL STATEMENT - COMMENTARY
12 April 2024
Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the Delphi Economic Forum IX
11 April 2024
Christine Lagarde, President of the ECB, Luis de Guindos, Vice-President of the ECB, Frankfurt am Main, 11 April 2024
27 March 2024
Remarks by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at an event on climate-related financial risks hosted by the Banco Central do Brasil
27 March 2024
Speech by Piero Cipollone, Member of the Executive Board of the ECB, at an event organised by the House of the Euro and the Centre for European Reform
Annexes
27 March 2024
22 March 2024
Slides by Philip R. Lane, Member of the Executive Board of the ECB, at the Policy Lecture at Aix-Marseille School of Economics (AMSE) in Marseille
19 March 2024
Interview with Luis de Guindos, Vice-President of the ECB, conducted by Michalis Psilos
English
OTHER LANGUAGES (1) +
Select your language
7 February 2024
Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Martin Arnold on 2 February 2024
3 February 2024
Interview with Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Jonathan Witteman on 29 January 2024
English
OTHER LANGUAGES (1) +
Select your language
31 January 2024
Interview with Luis de Guindos, Vice-President of the ECB, conducted by Kolja Rudzio
English
OTHER LANGUAGES (1) +
Select your language
22 January 2024
Contribution by Christine Lagarde, President of the ECB, French and German members of parliament and other personalities, published on n-tv.de
English
OTHER LANGUAGES (2) +
Select your language
3 April 2024
Governments and central banks can shield the economy from shocks with their decisions. The ECB Blog looks at a recent high-level conference that analysed the interaction of fiscal and monetary policy and questioned some long-held beliefs.
Details
JEL Code
E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→General
E42 : Macroeconomics and Monetary Economics→Money and Interest Rates→Monetary Systems, Standards, Regimes, Government and the Monetary System, Payment Systems
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
22 March 2024
The Eurosystem is shrinking its balance sheet, which makes more government bonds available for purchase. The ECB Blog looks at how markets are adjusting to this new situation with regard to bond price volatility, liquidity and the impact on repo markets.
Details
JEL Code
G20 : Financial Economics→Financial Institutions and Services→General
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
14 March 2024
Central banks have been collecting art for a long time. While the works were previously only accessible at their physical locations, more and more central banks now make their collections available online. The ECB Blog showcases four collections you can enjoy from wherever you are.
11 March 2024
In 2021-22 inflation surged due to the direct and indirect effects of the energy shock, together with a set of pandemic-related factors and the Russian invasion of Ukraine. In this post on The ECB Blog, Chief Economist Philip R. Lane looks at the monetary policy actions taken by the ECB in response to these extraordinary inflation shocks.
Details
JEL Code
E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
D81 : Microeconomics→Information, Knowledge, and Uncertainty→Criteria for Decision-Making under Risk and Uncertainty
22 February 2024
Bitcoin has failed on the promise to be a global decentralised digital currency. Instead it is used for illicit transactions. The latest approval of an ETF doesn’t change the fact that Bitcoin is not suitable as means of payment or as an investment.
Details
JEL Code
G12 : Financial Economics→General Financial Markets→Asset Pricing, Trading Volume, Bond Interest Rates
G20 : Financial Economics→Financial Institutions and Services→General
G29 : Financial Economics→Financial Institutions and Services→Other
12 April 2024
WORKING PAPER SERIES - No. 2925
Details
Abstract
This paper extends Boone (2008) by introducing a competition measure at the individual firm level rather than for an entire market segment. It is based on the elasticity between profits and efficiency and called marginal relative profitability (MRP). Its intuition is that when a small change in efficiency derived from marginal costs can cause a large change in profits, a firm exercises pressure on its peers and gains profits. The MRP is embedded in the theoretical framework of Boone and measures competition vis-à-vis other market participants. We apply this extended Boone indicator to individual bank-level competition in the loan market in the four largest euro area countries and Austria. The MRP distribution is skewed to the left and many banks have a MRP below one, indicating that those banks have little incentive to enhance their efficiency to increase their profits. The MRP approach is shown to be a powerful tool to test the efficient-structure, structure-conduct performance, and ‘quiet life’ hypotheses and to detect comparatively weak non-competitive banks. Our new measure of firm-level competition enriches and complements other competition measures and provides a promising starting point for future market power analyses.
JEL Code
D4 : Microeconomics→Market Structure and Pricing
L16 : Industrial Organization→Market Structure, Firm Strategy, and Market Performance→Industrial Organization and Macroeconomics: Industrial Structure and Structural Change, Industrial Price Indices
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
12 April 2024
WORKING PAPER SERIES - No. 2924
Details
Abstract
Investment funds hold a disproportionately larger fraction of domestic relative to foreign stocks. Stock market development and familiarity (language and distance) are considered key determinants for home bias. The literature neglects however that investors often invest in foreign funds domiciled in financial centers. We use a “look-through approach” to account for this misclassification. First, we find substantially smaller home bias estimates compared to those in the literature. Second, the explanatory power of plausible home bias determinants is lower than previously documented. Third, familiarity only plays a meaningful role when investors are households, highlighting the role of investor sophistication.
JEL Code
G11 : Financial Economics→General Financial Markets→Portfolio Choice, Investment Decisions
G15 : Financial Economics→General Financial Markets→International Financial Markets
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
12 April 2024
OTHER PUBLICATION
12 April 2024
OTHER PUBLICATION
Annexes
12 April 2024
ANNEX
12 April 2024
SURVEY OF PROFESSIONAL FORECASTERS
12 April 2024
SURVEY OF PROFESSIONAL FORECASTERS
Annexes
12 April 2024
ANNEX
12 April 2024
ANNEX
12 April 2024
ECONOMIC BULLETIN - BOX
Economic Bulletin Issue 3, 2024
Details
Abstract
This box summarises the findings of recent contacts between ECB staff and representatives of 57 leading non-financial companies operating in the euro area. According to these exchanges, which took place between 11 and 19 March 2024, aggregate activity was subdued at the start of the year, but there were some signs of a pick-up in demand and expectations of a gradual, albeit modest, recovery in the course of the year. Growth in selling prices picked up slightly in the first months of the year, owing mainly to a slight rebound in the prices of some intermediate goods and services. However, growth in prices closer to the final consumer continued to ease gradually, as did wage expectations.
JEL Code
E2 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy
E3 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles
L2 : Industrial Organization→Firm Objectives, Organization, and Behavior
9 April 2024
EURO AREA BANK LENDING SURVEY
Annexes
9 April 2024
EURO AREA BANK LENDING SURVEY - ANNEX
Related
8 April 2024
SURVEY ON THE ACCESS TO FINANCE OF ENTERPRISES IN THE EURO AREA
3 April 2024
WORKING PAPER SERIES - No. 2923
Details
Abstract
How a historic drop in bank deposits shapes banks’ loan supply? We exploit the effects of a large, and unexpected, increase in monetary policy rates to estimate the deposit channel of monetary policy using an extensive credit register that includes all bank-firm lending relationships in all euro area countries. We find that banks experiencing large deposit outflows reduce credit, but not the interest rate they charge, to the same borrower relative to other lenders. This credit restriction is stronger for fixed rate and longer maturity loans, but not for riskier borrowers. The effect is mostly driven by banks coming into the hiking period with a larger unhedged duration gap that renders borrowers of those banks more vulnerable to credit restrictions due to the deposit outflows as interest rates surge. We resort to the deposit beta as an instrument variable and a matched estimator that bear out the thrust of our results.
JEL Code
E51 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Money Supply, Credit, Money Multipliers
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
3 April 2024
OTHER PUBLICATION
3 April 2024
OTHER PUBLICATION
3 April 2024
OTHER PUBLICATION
27 March 2024
WORKING PAPER SERIES - No. 2922
Details
Abstract
This paper analyses the consumer’s decision to apply for credit and the probability of the credit being accepted in the euro area during a period characterized by the unprecedented concomitance of events and changing borrowing conditions linked to the global COVID-19 pandemic and the Russian invasion of Ukraine. We use data between 2020Q1 and 2023Q2 from the ECB’s Consumer Expectations Survey. We find that the credit demand is highest when the first lockdown ends and drops when supportive monetary compensation schemes are implemented. There is evidence that constrained households are significantly less likely to apply for credit. Credit is more likely to be accepted under favourable borrowing conditions and after the approval of national recovery plans. We also find that demographic, economic factors, perceptions and expectations are associated with the demand for credit and the credit grant.
JEL Code
C23 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Panel Data Models, Spatio-temporal Models
D12 : Microeconomics→Household Behavior and Family Economics→Consumer Economics: Empirical Analysis
D14 : Microeconomics→Household Behavior and Family Economics→Household Saving; Personal Finance
G51 : Financial Economics
25 March 2024
LETTERS TO MEPS
25 March 2024
SURVEY OF MONETARY ANALYSTS
22 March 2024
WORKING PAPER SERIES - No. 2921
Details
Abstract
This paper studies the impact of voluntary climate commitments by banks on their lending activity. We use administrative data on the universe of bank lending from 19 European countries. There is strong selection into commitments, with increased participation by the largest banks and banks with the most pre-existing exposure to high-polluting industries. Setting a commitment leads to a boost in a lender’s ESG rating. Lenders reduce credit in sectors they have targeted as high priority for decarbonization. However, climate-aligned banks do not change their lending or loan pricing differentially compared to banks without climate commitments, suggesting they are not actively divesting. We can reject that climate-aligned lenders divest from firms in targeted sectors by more than 2.6%. Firm borrowers are no more likely to set climate targets after their lender sets a climate target, which casts doubt on active engagement by lenders. These results call into question the efficacy of voluntary commitments.
JEL Code
Q50 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→General
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
22 March 2024
OTHER PUBLICATION
Plausibility checks performed in Anacredit datasets
21 March 2024
WORKING PAPER SERIES - No. 2920
Details
Abstract
We examine rating behaviour after the introduction of new regulations regarding Credit Rating Agencies (CRAs) in the European securitisation market. Employing a large sample of 12,469 ABS tranches issued between 1998 and 2018, we examine the information content of yield spreads of ABS at the issuance and compare the pre- and post-GFC periods. We find that the regulatory changes have been effective in tackling conflicts of interest between issuers and CRAs in securitisation. Rating catering seems to have disappeared in the post-GFC period. Yet we see limited effectiveness on rating shopping. It follows that rating over-reliance might be an issue, especially for investors of higher-quality ABS.
JEL Code
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
21 March 2024
WORKING PAPER SERIES - No. 2919
Details
Abstract
We use nonlinear empirical methods to uncover non-linearities in the propagation of monetary policy shocks. We find that the transmission on output, goods prices and asset prices is stronger in a low growth regime, contrary to the findings of Tenreyro and Thwaites (2016). The impact is stronger on private investment and durables and milder on the consumption of nondurable goods and services. In periods of low growth, a contractionary monetary policy implies lower expected Treasury rates and higher premia along the entire Treasury yield curve. Similarly, the corporate excess bond premium rises and the stock market drops substantially during recessions. We use the monetary policy surprises and their predictors provided by Bauer and Swanson (2023a), and identify an additional predictor, the National Financial Condition Index (NFCI), which is relevant in the nonlinear setting. A Threshold VAR, a Smooth-Transition VAR and nonlinear local projection methods all corroborate the findings.
JEL Code
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles

Interest rates

Marginal lending facility 4.75 %
Main refinancing operations (fixed rate) 4.50 %
Deposit facility 4.00 %
20 September 2023 Past key ECB interest rates

Inflation rate

Inflation dashboard

Exchange rates

USD US dollar 1.0652
JPY Japanese yen 163.16
GBP Pound sterling 0.85424
CHF Swiss franc 0.9716
Last update: 12 April 2024 Euro foreign exchange rates