The ECB is looking to evaluate whether its definition of price stability is effective in helping anchor inflation expectations. We argue that the current definition does not make for a very good focal point. To become a focal point the ECB needs to do two things. Price stability should be defined as inflation at 2 percent,. Remove therefore the unnecessary ambiguity of "below but close to 2 percent". But that is not enough. Around that 2 percent, the ECB should say which levels of inflation it is prepared to tolerate. There need to be explicit bands defined around that 2 percent to provide a framework for economic agents to evaluate Central Bank performance. And as the ECB will have to operate under high levels fo uncertainty these bands need to be wider than tolerance of inflation between 1 and 3 percent, which is what many inflation targeting Central Banks have tolerated over the years.
At this event, Luis Garicano, member of the European Parliament, presented his two proposals to resurrect the European Banking Union: "a Safe Portfolio" and "a Single Resolution Board +".
Bruegel is delighted to welcome the governor of the Central Bank of Ireland, Gabriel Makhlouf. He will deliver a keynote address about how adequate the European toolbox is to tackle financial stability risks in a low rate environment. Following his speech, a panel of experts will further discuss the topic.
The European Central Bank’s November 2019 Financial Stability Review highlighted the risks to growth in an environment of global uncertainty. On the whole, the ECB report is comprehensive and covers the main risks to euro-area financial stability, we highlight issues that deserve more attention.
The EU urgently needs to conduct joint preparedness exercises and create uniform information and disclosure requirements that help build a true pan-European insurance market for cyber risks
This event will discuss if Sweden should join the European banking union and the general state of the union.
The Libra Association claims it will be analogous to a currency board regime, but they have overlooked the problems of monetary management that come with it
While the euro is now a leading global currency and the European Central Bank has become a comprehensive banking supervisor, Europe’s markets have been treading water.
This paper’s main conclusion is that Russia’s economy cannot grow at the pace recorded in the early and mid-2000s because of the different external environment, the different stage of development and serious demographic headwinds.
If EU banks are to mobilise a greater share of loans for sustainable projects they will need a reliable policy framework, clear internal performance targets and the relevant skills. A discount on bank capital underlying such assets is neither justified nor likely effective. A comprehensive review of how climate risks are reflected in prudential regulation is nevertheless in order
The most concerning aspect for the Chinese economy will still be to hold up domestic demand. The rapidly rising household debt will put further breaks of the households' ability to purchase durable goods
In the last decade, most advanced economies have grown more slowly than before. Slower growth has frequently been seen as a legacy of financial crises, especially that of 2007–2009.