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

Some banks reduce balance sheet items around reporting dates. Such “window dressing” camouflages the true risks of a bank, impairs markets as well as bank resilience and supervision.  ECB staff members Claudio Bassi, Markus Behn, Michael Grill, Massimo Libertucci, Par Torstensson and Peter Welz look at how regulators and supervisors are taking action.

The original post was published on 02 May 2024.
https://www.ecb.europa.eu/press/blog/date/2024/html/ecb.blog240502~aae1564b3d.en.html

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Closing the blinds on banks' window dressing

Surprisingly strong employment growth in an environment of weak economic activity has recently led to declining labour productivity in the euro area. Oscar Arce and David Sondermann discusses causes and prospects for a cyclical recovery in productivity growth.

The original post was published on 6 May 2024.
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Low for long? Reasons for the recent decline in productivity

Despite rising interest rates, more consumers are applying for loans. This demand comes mainly from households with lower income. Omiros Kouvavas and Athanasios Tsiortas take a closer look into credit applications and how they affect banks’ credit standards and credit issuance to households.

The original post was published on 6 May 2024.
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Consumer credit: Who’s applying for loans now?

Why do central banks mostly give their guidance for future monetary policy in qualitative terms rather than providing a numerical formula? Christophe Kamps takes a look through the lens of the “ABCs” of the ECB’s qualitative reaction function.

The original post was published on 22 May 2024.
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The ABCs of the ECB’s reaction function

Negotiated wage growth in the euro area increased in the first quarter of 2024. Matthias Bing, Sarah Holton, Gerrit Koester and Marc Roca I Llevadot a illustrates how the ECB wage tracker can help to put latest developments in negotiated wage growth into perspective.

The original post was published on 23 May 2024. 

https://www.ecb.europa.eu/press/blog/date/2024/html/ecbblog20240523~1964e193b7.en.html

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Tracking euro area wages in exceptional times

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

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.

Tracking euro area wages in exceptional times

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