The European Central Bank needs a new tool to prevent the current rise in spreads, triggered by monetary policy tightening, from escalating into a new euro-area crisis.
The ECB should design a specific tool that will accompany interest rate hikes to neutralise the risk of fragmentation directly for countries facing it, staying within the bounds of the EU treaties and ensuring political legitimacy. We also advocate structural changes to the ECB’s collateral framework to avoid unnecessary uncertainty surrounding the safe asset status of European sovereign bonds.
Even though inflation in the euro area is lower than in the US, three issues make it a lot more difficult for the ECB to control inflation and preserve financial stability. Once again, the limits of EMU architecture are visible and will require a rethink.
What are the implications of prolonged inflation?
A relatively new fintech market, BNPL is currently not regulated in the EU, meaning that consumers do not have the same protection level as they do for other credit products.
ECB Executive Board Member Philip Lane discusses the outlook for Euro area economies.
Article published in the Journal of Economic Policy Reform.
In-depth analysis on the banking supervision cooperation in Bulgaria and Croatia prepared for the European Parliament's Committee on Economic and Monetary Affairs (ECON).
How to address vulnerabilities in banks in the coming years?
The events that have unfolded since 24 February have solved one dispute: inflation is no longer temporary.
Review of 'Monetary policy in times of crisis: a tale of two decades of the European Central Bank' published in the Central Banking.
Presentation of the Yearbook of the Euro 2022.