The Eurosystem is shrinking its balance sheet, which makes more government bonds available for purchase. Federico Maria Ferrara, Tom Hudepohl, Pamina Karl, Tobias Linzert, Benoit Nguyen and Lia Vaz Cruz look at how markets are adjusting to this new situation with regards to bond price volatility, liquidity, and the impact on repo markets.  

The original post was published on 22 March 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog20240322~54dcd060b1.en.html

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Who buys bonds now? How markets deal with a smaller Eurosystem balance sheet

Governments and central banks can shield the economy from shocks with their decisions. Jacopo Cimadomo and Demosthenes Ioannou look back at a recent high-level conference that analysed the interaction of fiscal and monetary policy and questioned some long-held beliefs. 

The original post was published on 21 March 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog20240403~f3e74210a9.en.html

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Fiscal and monetary policy: new insights to old questions

The ECB recently updated its data on the impact of climate change on the financial system. How green are green bonds and banks’ loan portfolios? How strongly could they be affected by natural hazards? Andrew Kanutin discusses these and other new insights from the data. 

The original post was published on 18 April 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog20240418~2240ea1850.en.html

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Improved data: how climate change impacts banks

Many people appreciate privacy when paying, and want their data protected. Current electronic means of payment are not optimal in this regard. We are designing the digital euro to be the most private electronic payment option. Maarten Daman explains.

The original post was published on 13 June 2024. 

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Making the digital euro truly private

With the reduction of the Eurosystem’s balance sheet, central bank liquidity is declining. As liquidity is unevenly distributed among banks, an effective redistribution and use of market funding are essential. This worked well so far, with limited recourse to Eurosystem’s refinancing operations argue Tom Hudepohl, Pamina Karl, Tobias Linzert, Benoit Nguyen, Marta Skrzypińska and Lia Vaz Cruz.

The original post was published on 18 June 2024.
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How banks deal with declining excess liquidity

Repo markets are vital for banks to source liquidity and securities. They also represent an essential link in the monetary policy transmission chain. While the Eurosystem is in the process of reducing its market footprint, repo markets are going through a phase of change. Svetla Daskalova, Federico Maria Ferrara, Pedro Formoso da Silva, Pamina Karl and Thomas Vlassopoulos look at dynamics in this market.

The original post was published on 23 July 2024. https://www.ecb.europa.eu/press/blog/html/index.en.html

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Repo markets: Understanding the effects of a declining Eurosystem market footprint

Euro area exporters are facing tougher competition from China. But why is that? Alexander Al-Haschimi, Lorenz Emter, Vanessa Gunnella, Iván Ordoñez Martínez, Tobias Schuler, and Tajda Spital look at the important role played by price competitiveness and the ongoing industrial upgrades being made in China.

The original post was published on 3 September 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog240903~57f1b63192.en.html

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Why competition with China is getting tougher than ever

Hedge funds have substantially increased their trading activity in euro area government bond and repo markets. Federico Maria Ferrara, Tobias Linzert, Benoit Nguyen, Imène Rahmouni-Rousseau, Marta Skrzypińska and Lia Vaz Cruz evaluate how this plays out for market functioning and intermediation.

The original post was published on 23 September 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog20240923~d859db790b.en.html

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23 September 2024

Hedge funds: good or bad for market functioning?

China has been an important and reliable supplier of critical inputs for European industries for decades. But how vulnerable would our companies be if that suddenly stopped? Ludovic Panon, Laura Lebastard, Michele Mancini, Dennis Essers, Francisco Requena and Jacopo Timini estimate the potential losses in value added for manufacturers in five countries.

The original post was published on 9 October 2024.
https://https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog241009~0cec85fd2c.en.html

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Critical inputs from China: how vulnerable are European firms to supply shortages?

The original post was published on 13 November 2024.
(https://www.ecb.europa.eu/press/blog/html/index.en.html)

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Quantitative Tightening: How do shrinking Eurosystem bond holdings affect long-term interest rates?

At the height of the financial crisis Greece, Ireland, Portugal and Cyprus needed help. The international assistance came under the condition of economic adjustment aiming to restore financial stability, debt sustainability and growth. How did the four countries recover from their crises? 

The original post was published on 3 December 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog20241203~5d969f5a3b.en.html

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Greece, Ireland, Portugal and Cyprus: Crisis and Recovery

The growth of negotiated wages is expected to ease in 2025. This is the information emerging from the ECB wage tracker, which we will publish on a regular basis from now on. Colm Bates, Vasco Botelho, Sarah Holton, Marc Roca I Llevadot and Mirko Stanislao explain the tool and how it can help monitor wage pressures in the euro area. The original post was published on 18 December 2024.

https://ecb.europa.eu/press/blog/date/2024/html/ecb.blog20241218~1b3de009b4.en.html

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The ECB wage tracker: your guide to euro area wage developments

When returns on safe assets fall, investors move some of their money to riskier assets. This ECB Blog shows: US Treasuries are replaced by global bonds, while substitutes for Bunds are mostly from Europe. This effect is smaller in times of market stress.

The original post was published on 06 January 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250106~7a7fd7104b.en.html

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Portfolio rebalancing: investors’ safe asset substitution patterns

The rise of working-from-home during the pandemic dramatically changed the way we organise work. And teleworking is transforming more than just our professional lives. YEP finalist Morgane Richard looks at how this shift is affecting the housing market and inequality. 

The original post was published on 08 January 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250108~5b33e426a3.en.html

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Working from home: Effects on housing demand and inequality

Central banks project future developments based on past data patterns and a set of assumptions. Crises can change economic structures, complicating this forecasting. The ECB Blog explains how scenario, risk and sensitivity analyses address the new uncertainty.

The original post was published on 15 January 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250115~302850a242.en.html

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Exploring an uncertain future with the help of scenarios

The monetary policies of the ECB and the US Federal Reserve are not always in sync. But how does the Fed’s policy affect the euro area economy? Stefan Gebauer, Georgios Georgiadis, Fédéric Holm-Hadulla and Thomas Kostka look at how monetary policy in the United States travels across the Atlantic and what this means for the ECB.

The original post was published on 5 February 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250205~44578cf53f.en.html

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What happens when US and euro area monetary policy decouple?

The gender gap in labour markets is narrowing. But this process has slowed down. The ECB Blog gives an overview of recent developments for all euro area countries. 

The original post was published on 7 March 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250307~85fd774bd3.en.html

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The gender gap at work is closing – but slowly

AI adoption requires enormous amounts of electricity. And so does greening the economy. Are the digital and green transitions clashing or can they be successfully achieved together? Miles Parker takes a closer look.

The original post was published on 25 March 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250325~ed12b0ff35.en.html

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Release date:
25 March 2025

AI versus green: clash of the transitions?

We constantly hear of exciting new ways AI tools can help to tackle economic problems and the productivity gains they bring. However, benefits can only materialize when firms actually use AI. Antonin Bergeaud, Guzmán González-Torres Fernández, Vincent Labhard and Richard Sellner explain.

The original post was published on 28 March 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250328~60c0a587f7.en.html

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Release date:
28 March 2025

AI can boost productivity – if firms use it

Foreign workers play an increasingly important role in the euro area labour markets. Oscar Arce, Agostino Consolo, António Dias da Silva and Marco Weissler blog analyse the effects migrants had on growth across the largest countries in recent years. It also discusses changing labour market participation patterns among foreign workers.

The original post was published on 8 May 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250508~897078ce87.en.html

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Foreign workers: a lever for economic growth

Claudia Marchini and Alexander Popov demonstrate that over the last 25 years the EU’s trading partners have become less and less democratic, and they investigate the background of this development and the dynamics at play.

The original post was published on 8 July 2025.
https://www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog...

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Release date:
8 July 2025

Trading with dictators? A historical review of the EU’s business partners

Based on joint research conducted by the ECB and Oxford University’s Resilient Planet Finance Lab, Andrej Ceglar, Francesca Danieli, Irene Heemskerk, Mark Jwaideh and Nicola Ranger argue that the degradation of natural ecosystems slows growth and leads to financial instability and that surface water scarcity alone can put almost 15 per cent of euro area’s economic output at risk.

The original post was published on 23 May 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250523~d39e3a7933.en.html

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Release date:
23 May 2025

The European economy is not drought-proof

Pedro Baptista, Maarten Dossche, Andrew Hannon, Dorian Henricot, Omiros Kouvavas, Davide Malacrino and Larissa Zimmermann investigate the monetary policy transmission from mortgage rates to consumption. They show that the resulting drag on consumption could last at least until 2030.


The original post was published on 28 May 2025.
https://www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250528~bd3c3b750a.en.html

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Release date:
28 May 2025

Monetary policy transmission: from mortgage rates to consumption

Memories of hyperinflation live on in public debates on money. In the case of Germany, the trauma of 1923 is widely seen as the source of the country’s preference for fiscal discipline and stability-oriented central banking. David Barkhausen sheds new light on the collective memory and its genesis.

The original post was published on 20 June 2025.
www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250620~13431554af.en.html

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Hyperinflation: trauma and its reconstruction

July 2025 began with yet another heatwave across Europe. ECB research finds such events can substantially reduce economic activity in affected regions and increase food prices. With global warming, future heatwaves are likely to have more pronounced economic effects. Miles Parker has a closer look.

The original post was published on 13 July 2025.
https://ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250713~631b265757.en.html

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Has the heatwave been driving you nuts?

Jürgen Schaaf explains how stablecoins are reshaping global finance, with the US dollar at the helm. He suggests that without a strategic response, European monetary sovereignty and financial stability could erode. However, he argues that in this disruption there is also an opportunity for the euro to emerge stronger.

The original post was published on 28 July 2025.
www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250728~e6cb3cf8b5.en.html

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Release date:
28 July 2025

From hype to hazard: what stablecoins mean for Europe

Lukas Boeckelmann, Lorenz Emter, Vanessa Gunnella, Karin Klieber and Tajda Spital argue that with trade tensions between China and the United States reaching new heights , Chinese exports may be redirected to the euro area. In a severe scenario, this additional supply and the accompanying lower import prices could bring down euro area inflation by as much as 0.15 percentage points.

The original post was published on 30 July 2025.
www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250730~833a22650e.en.html

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Release date:
30 July 2025

China-US trade tensions could bring more Chinese exports and lower prices to Europe

This post by Niccolò Battistini and Johannes Gareis explores the ripple effects of the ECB’s recent monetary policy on housing affordability, housing sales and households’ home goods consumption.

The original post was published on 31 July 2025.
www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250731...

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Release date:
31 July 2025

The ripple effects of monetary policy on housing and consumption

Pablo Anaya Longaric, Katharina Cera, Georgios Georgiadis and Christoph Kaufmann examine how investment funds adjust their holdings of euro area sovereign debt in comparison with other domestic and international investor groups, including banks, insurance companies and households in times of stress in euro area sovereign bond markets.

The original post was published on 12 August 2025.
https://www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250814~86d5171bf2.en.html

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Release date:
12 August 2025

Who are the “bond vigilantes” on sovereign debt markets?

A field experiment indicates that direct communication with ECB visitors better anchors their inflation expectations. As Alexander Jung, Francesco Paolo Mongelli and Christian Scherf show, visitors with little knowledge of monetary policy are particularly likely to align their expectations with the ECB’s inflation target after speaking to central bankers.

The original post was published on 16 September 2025.
www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250916~23a41f157c.en.html

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ECB visitors – can direct communication alter inflation expectations?

Good statistics are accurate, timely, consistent and comparable. Only then can they be the unbiased reality check needed for responsible decision-making. Claudia Mann looks back at past mistakes and what Europe has learned from them.

The original post was published on 26 September 2025.
www.ecb.europa.eu/press/blog/date/2025/html/ecb.blog20250926~e348e2b4b9.en.html


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Don’t blame the herald: statistical independence is indispensable

Do European workers see US tariff hikes as a threat to their job security? According to an ECB survey, while most workers are fairly relaxed, those in export-oriented sectors and those with lower incomes are more worried about their jobs than before the tariff increase.

The original post was published on 10 October 2025.
ecb.europa.eu/press/blog/date/2025/html/ecb.blog20251010~7737b271a0.en.html

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Tariffs: are workers more worried about their jobs?

The economist Robert Lucas famously wrote that “Once one starts to think about economic growth, it is hard to think about anything else.” The Nobel committee seems to agree. For the second year in a row, it has chosen to honour work on economic growth. This ECB Blog post by Conny Olovsson and Alexander Popov looks at the research of this year’s laureates.

The original post was published on 20 October 2025.
ecb.europa.eu/press/blog/date/2025/html/ecb.blog20251020~a889f0290a.en.html

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Understanding sustained growth: the 2025 Nobel Prize and why it matters for Europe

The ECB Blog offers new insights on the economy and central bank policies based on our data, analysis and research - for the euro area and beyond. For the full texts of our posts, including visuals, please visit our website.

Posts are authored by ECB staff and the audio versions are machine generated. The views expressed are those of the posts' authors and not necessarily those of the European Central Bank and the Eurosystem.

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