Which macroeconomic policy response is the best option to deal with the crisis currently unfolding and will ensure that the recovery will be as quick as possible?
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.
In responding to the global financial crisis, the ECB has pushed its monetary policy into unchartered territories . Today, it appears increasingly constrained by persistently low interest rates. This paper seeks to understand this challenge and assess whether its toolkit would allow the ECB to weather a European recession.
It is time for the EU Council to make quick progress on the fiscal front and announce something as soon as possible to show that it taken full measure of the severity of the situation.
The current pandemic is shaking the financial system. How can banks react ? Is a consolidation of the financial system in Europe needed in order to respond to this crisis ? Will our economies suffer from this pandemic as much as they did in 2008 ? This week, Giuseppe Porcaro is joined live by Guntram Wolff and Nicolas Véron to discuss banks and loan losses in the pandemic turmoil.
At this online event we will record an episode of the Sound of Economics, Bruegel's podcast series. In this episode, we discuss the implications of the coronavirus crisis on financial stability and credit availability.
Coronavirus means many European Union countries will soon face major increases in their sovereign debt burdens, exacerbated by the sudden collapse of economic activity. What should the European Union do to address these debt problems?
The banking system is critical to society and requires attention and support. In doing so, however, tough love is preferable to complacency.
Spreads are rising again in the euro-area at the worst possible time, when fiscal policy is needed to fight the coronavirus pandemic and the related economic shock. This blog post reviews the main options available to European policymakers, their feasibility and potential effectiveness to deal with this issue.
Lagarde needs a different bazooka in responding to a natural disaster like COVID-19.
In 2018, 320 million trips were made between EU countries and almost 2 million people crossed Schengen borders to go to work. Stopping them would cause serious economic disruption.
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.