European Central Bank – Publications

14 July 2025By Ulrich Bindseil*TARGET Services are the backbone of Europe’s financial market infrastructure. Like a spine, they have to be both strong and supple. Strong enough to process large volumes and values while maintaining high levels of performance, and supple and flexible enough to respond to changing needs, technologies and geopolitical conditions.Free flow of central bank money, securities and collateralTARGET Services comprise T2, TARGET2-Securities (T2S), TARGET Instant Payment Settlement…

13 July 2025By Miles ParkerJuly 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.With a hot and sticky start to July in Frankfurt, sleep has been difficult. My daughter has been a bit grumpy. As have I. Those are just the…

11 July 2025By Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECBEuropean banks have made forward strides in managing climate and nature-related risks. But more still needs to be done as we often see that practices are only applied to a subset of relevant exposures, geographic areas and risk categories. To help banks improve further, later this year the ECB…

9 July 2025By Sabine Mauderer and Livio Stracca[1]Climate change is no longer “the Tragedy of the Horizon”, as Mark Carney put it, but an imminent danger. In the next five years, extreme weather events could already put up to 5% of the euro area’s economic output at risk, according to the new short-term scenarios of the Network for Greening the Financial System (NGFS).Climate-related risks are an immediate concern for financial…

8 July 2025By Claudia Marchini and Alexander PopovOver the last 25 years the EU’s trading partners have become less and less democratic. The ECB Blog investigates the background of this development and the dynamics at play.Do democratic values play a role in trade? While the weakening of democratic norms around the globe has sparked renewed interest in this question, economic theory and historical examples do not provide a definitive answer.On…

3 July 2025By José Manuel Campa and Isabel SchnabelEuropean and national authorities have joined forces with banks to integrate reporting requirements across Europe. This will reduce costs for banks and improve data quality. In this blog post we describe the European integrated reporting initiative and present some initial results.Collecting data from banks is essential for authorities to conduct monetary policy, supervision and resolution. But banks in Europe are facing more…

27 June 2025By Elena Banu, Johanne Evrard, Daniel Jonas Schmidt and Michael WedowThere is now an urgent need to channel retail savings into European capital markets in order to develop those markets and finance EU priorities. In this edition of the ECB Blog, we show that an EU savings standard could increase retail participation in the capital markets, benefiting savers, boosting investment in EU companies and supporting strategic priorities.[1]There are…

20 June 2025By David BarkhausenMemories 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. Historical analysis sheds new light on the collective memory and its genesis.How we think, feel and talk about money is shaped by the past. And depending on where we grow…

17 June 2025By Christine Lagarde, President of the European Central BankFor the euro to reach its full potential, Europe must strengthen three foundational pillars: geopolitical credibility, economic resilience and legal and institutional integrity.We are witnessing a profound shift in the global order: Open markets and multilateral rules are fracturing, and even the dominant role of the US dollar, the cornerstone of the system, is no longer certain. Protectionism, zero-sum thinking…

10 June 2025By Benjamin Böninghausen and Florian HartmannGeopolitical tensions and trade policy uncertainty are injecting unpredictability into global financial markets. What seems like rock-solid market sentiment today can turn into jitters tomorrow. In this ECB Blog, we present a new risk appetite indicator to systematically track such shifts in market sentiment.Market swings – important beyond the trading floorCentral banks need to keep an eye on market sentiment as it signals…

28 May 2025By Pedro Baptista, Maarten Dossche, Andrew Hannon, Dorian Henricot, Omiros Kouvavas, Davide Malacrino and Larissa ZimmermannDespite recent ECB rate cuts, the average interest rate on mortgages is expected to increase further. This is because of lagged effects from the latest hiking cycle. The ECB blog shows that the resulting drag on consumption could last at least until 2030.Mortgage contracts often have interest rates fixed for long periods, or…

23 May 2025By Andrej Ceglar, Francesca Danieli, Irene Heemskerk, Mark Jwaideh and Nicola RangerThe degradation of natural ecosystems slows growth and leads to financial instability. Water scarcity, natural flood protection and water quality are most critical. Surface water scarcity alone puts almost 15% of the euro area’s economic output at risk.The euro area economy depends heavily on natural ecosystems and the services they provide. These include clean water, flood protection,…

8 May 2025By Oscar Arce, Agostino Consolo, António Dias da Silva and Marco WeisslerForeign workers play an increasingly important role in the euro area labour markets. This ECB blog analyses the effects migrants had on growth across the largest countries in recent years. It also discusses changing labour market participation patterns among foreign workers.Sluggish productivity growth and weak capital accumulation have hampered post-pandemic recovery in the euro area.[1] Amid this…

5 May 2025By Gert Bijnens, John Hutchinson and Arthur Saint Guilhem Lasting high energy prices are putting pressure on industries all across Europe. This is hitting some regions, such as southern Germany, the Ruhr and northern Italy, harder than others. The ECB Blog examines the implications for employment. High energy costs threaten the competitiveness of European firms and weigh on employment. Based on firm-level data, we estimate that a permanent…

29 April 2025By Imène Rahmouni-Rousseau and Isabel Schnabel[1]At the end of 2024 – after nearly five years of operations, more than 110,000 bond market transactions and peak holdings of €1.7 trillion – reinvestments under the pandemic emergency purchase programme (PEPP) came to an end. This blog post takes stock and highlights some aspects of PEPP implementation in light of the data we now make publicly available.In March 2020 the ECB…

25 April 2025By Benjamin Hartung, Tobias Linzert, Imène Rahmouni-Rousseau, Yannik Schneider and Marta Skrzypińska[1]One year after its announcement, the new operational framework is working as intended. Euro area banks have adapted to declining central bank reserves as the Eurosystem's balance sheet is normalising. The ECB Blog assesses how banks and money markets cope with the new environment. The normalisation of monetary policy over recent years has also meant declining amounts…

18 April 2025By Fédéric Holm-Hadulla and Sebastiaan PoolCentral banks usually seek to align very short-term interest rates in the money market with their own policy rate. But money market rates fluctuate also for reasons other than policy. This blog shows that monetary policy is more effective if such fluctuations are small.Discussions about monetary policy usually centre on whether interest rates should go up, down or stay the same. The complexities…

7 April 2025By Olivier Coibion, Dimitris Georgarakos, Yuriy Gorodnichenko, Geoff Kenny and Justus MeyerMilitary and diplomatic conflicts harm economic growth. This ECB blog shows that the expected length of wars matters for how strongly they weigh on consumer sentiment.[1]Geopolitical tensions can make consumers worry about their personal financial future and the economy at large. Data from the ECB’s Consumer Expectations Survey (CES)[2] suggests both notable concerns about geopolitical tensions and…

4 April 2025By Emil Bandoni, Giorgia De Nora, Margherita Giuzio, Ellen Ryan and Manuela StorzInstitutional investors are increasingly active in housing markets across Europe. The ECB blog examines implications for house price growth and the transmission of monetary policy. Institutional investors have been shaking up Europe’s housing markets over the past decade: if you are renting in major cities like Paris, Dublin or Madrid, there is a good chance your…

28 March 2025By Antonin Bergeaud, Guzmán González-Torres Fernández, Vincent Labhard and Richard SellnerWe 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.This post is part of a miniseries related to the ECB conference “The Transformative Power of AI”, on 1-2 April 2025, bringing together researchers, practitioners, and policymakers. Learn…

25 March 2025By Miles ParkerAI 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? The ECB Blog takes a closer look.This post is part of a miniseries related to the ECB conference “The Transformative Power of AI”, on 1-2 April 2025, bringing together researchers, practitioners, and policymakers. Learn more here.Two of the biggest…

21 March 2025By António Dias da Silva and Marco WeisslerAI is already part of many workers’ daily routines. Some fear losing their jobs, but most don’t. The ECB Blog looks at how workers are using AI tools, how they feel about it and what that means for work in the future.This post is part of a miniseries related to the ECB conference “The Transformative Power of AI”, on 1-2 April…

18 March 2025By Claudia Buch and Isabel SchnabelAs the normalisation of the Eurosystem balance sheet progresses, the aggregate amount of central bank liquidity available to banks in the euro area will fall over the coming years. This blog explains the role played by the Eurosystem’s refinancing operations within the operational framework for monetary policy implementation. The ECB, both as a monetary policy authority and as a supervisor, expects that banks…

7 March 2024 By Clémence Berson, Vasco Botelho, Luis Guirola Abenza, Laura Hospido, Friderike Kuik, Christiane Nickel and Manuel Rojo Lopez 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 gender gap at work is closing – but slowly. Women are paid less for their work than men are.[1] Inequality…

20 February 2024Pedro Baptista, Colm Bates, António Dias da Silva, Maarten Dossche and Marco WeisslerEuro area firms hold on to their workforce, despite poor economic conditions. For a significant share of workers this means a lower workload than usual. In turn, many put more money aside as they worry about job security and wages, as the ECB Blog shows.When the economy slows down, so does labour productivity. This link is…

11 February 2025By Marinela-Daniela Filip, Daphne Momferatou and Susana Parraga-Rodriguez At the heart of the euro area’s competitiveness challenges lies weak productivity growth. The ECB Blog looks at how this makes it more difficult to carry out monetary policy. While companies in the euro area are getting more productive, they are doing so at a much slower pace than their competitors. Weak productivity growth is putting monetary policy in a…

5 March 2025By Stefan Gebauer, Georgios Georgiadis, Fédéric Holm-Hadulla and Thomas KostkaThe 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? This ECB Blog looks at how monetary policy in the United States travels across the Atlantic and what this means for the ECB.The global economy is interconnected. Central banks’ monetary policies therefore…

1 February 2025Christine Lagarde, President of the European Central Bank, and Ursula von der Leyen, President of the European CommissionRemaining competitive is fundamental for Europe’s future. We need faster economic growth and higher productivity to protect the quality of life for Europeans – from their jobs and incomes to their security and welfare.Europe must act. Our competitiveness is at risk. While a global revolution in artificial intelligence unfolds, the EU…

20 January 2025By Luis de Guindos, Vice-President of the ECB, and Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECBStress tests are of crucial importance to assess banks’ resilience under adverse economic conditions. In previous stress tests, however, some banks submitted overly optimistic projections. Despite thorough quality assurance by supervisors, this behaviour makes it more likely that the risks some…

15 January 2025By Matteo Ciccarelli, Matthieu Darracq Pariès, Bettina Landau and João SousaCentral 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.We use economic models and data patterns from the past to project the future. In normal times, assessing what conditions will be…

10 January 2025By Arnaud DyèvreThis is the third post in our series featuring work submitted to the ECB’s 2024 Young Economist Prize. Arnaud Dyèvre was selected as one of the finalists with the research highlighted in this post. Applications for the 2025 Prize will be open from 13 January to 12 February 2025. For more details, go to the dedicated webpage.Investments in R&D typically foster productivity growth. But the funding…

8 January 2025By Morgane RichardThis is the second post in our series featuring work submitted to the ECB’s 2024 Young Economist Prize. Morgane Richard was selected as one of the finalists with the research highlighted in this post. Applications for the 2025 Prize will be open from 13 January to 12 February 2025. For more details, go to the dedicated webpage.The rise of working-from-home during the pandemic dramatically changed the…

6 January 2025By Tsvetelina NenovaThis is the first post in our series featuring the work of the ECB’s 2024 Young Economist Prize finalists. Tsvetelina Nenova won with the research highlighted in this post.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…

18 December 2024By Colm Bates, Vasco Botelho, Sarah Holton, Marc Roca I Llevadot and Mirko StanislaoThe 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. The ECB Blog explains the tool and how it can help monitor wage pressures in the euro area.Wages are an important driver of…

16 December 2024By Stefan Gebauer, Thomas McGregor and Sebastiaan PoolThough overall inflation has come down a lot, domestic inflation remains stubbornly high. This is typical for monetary policy tightening cycles. To understand why, The ECB Blog looks at how monetary policy is transmitted to wages, profits and productivity.In response to surging inflation, the ECB decisively raised interest rates and tightened its policy stance. Inflation in the euro area has since…

3 December 2024By Daniela Filip, Klaus Masuch, Ralph Setzer and Vilém Valenta 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?Many euro area countries experienced fiscal troubles and financial stress during the crisis years, especially during the…

28 November 2024By François Haas, Cornelia Holthausen and Vasileios Madouros[1]The European Commission is seeking the views of stakeholders on policies to guard against the build-up of systemic risk in the financial sector beyond banks. This ECB Blog post describes the pillars of a macroprudential approach for the so-called non-bank financial sector and explains the need to further develop the policy framework.Since the global financial crisis, a key development in the…

19 November 2024By Luis de GuindosMeeting the EU’s climate neutrality targets calls for deep structural changes and significant private funding, requiring a healthy financial system. That’s why we’ve tested how resilient banks, investment funds and insurers are to stresses arising during the green transition. ECB Vice-President Luis de Guindos explains the findings.Achieving a carbon-neutral European Union by 2050 will require a resilient financial sector to provide the funding for the…

14 November 2024 By Yıldız Akkaya, John Hutchinson, Kasper Jørgensen and Emanuel SkeppåsThe Eurosystem has started to reduce its bond holdings. This ECB Blog post investigates how strongly the shrinking balance sheet affects long-term interest rates. Estimates based on the Survey of Monetary Analysts suggest: an expected €1 trillion reduction in bond holdings may raise long-term risk-free interest rates by about 35 bps.The ECB reacted forcefully in response to the…

12 November 2024Christine LagardeComplacency in fighting climate change and preserving biodiversity is endangering our economic survival. The longer we wait, the higher the costs will be. Christine Lagarde, President of the European Central Bank, warns of the growing gap between the commitments made and the investment needed.We’ve all heard it time and again: either we tackle climate change and safeguard nature, or we face the steep price of our inaction.…