Alberto Martín, Enrique Moral-Benito and Tom Schmitz, (2019), “The financial transmission of housing bubbles: evidence from Spain”, ECB Working Paper Series No 2245, February How do housing bubbles affect other economic sectors? We show that in the presence of collateral constraints, a bubble initially raises housing credit demand and crowds out credit to non-housing firms. If the bubble lasts, however, housing credit repayments raise banks’ net worth and expand credit …Read More

Pavlos Eleftheriadis, (2019), “Solidarity in the Eurozone”, Bank of Greece Working Paper 256, January Proposals for Eurozone reform aim to complete its institutional architecture by securing stability without creating moral hazard. Such policy arguments inevitably rely, however, on implicit assumptions about justice, or on what is owed to whom. A common assumption is that member states are solely responsible for what happens to them. This paper, written from the point …Read More

Benoît Coeuré, (2019), “Should the ECB care about the euro’s global role?”, VoxEU, 25 February There is a growing debate in Europe as to whether recent shifts in global governance should be seen as a reason to strengthen the global role of the euro. This column explains that while the ECB does not take a view on foreign policy questions, the alignment between policies that will strengthen the euro’s global …Read More

Peter Hoffmann, (2019), “Interest rate risk in the euro area”, ECB Research Bulletin No. 55, 22 February Challenging conventional wisdom, recent research shows that, collectively, euro area banks have limited exposure to interest rate risk, but that their individual exposures vary significantly from institution to institution. Differences in interest-rate setting conventions for loan contracts, especially mortgages, across euro area countries have been shown to be an important driver of this …Read More

Ferdinando Giugliano, (2019), “The ECB Has Policy Makers, Not Superheroes”, Bloomberg, 22 February Spare a thought for the European Central Bank. The minutes of the last Governing Council, published on Thursday, show the central bank is in a bind over the state of the euro zone recovery and the next steps to take. Relevant Posts Marcus Ashworth, (2019) «ECB Is Awake and Asleep at the Same Time», Bloomberg Opinion, 19 …Read More

Andreas Bieler, Jamie Jordan and Adam David Morton, (2019), “The euro crisis showed the limits of using market integration and free trade as vehicles for development”, LSE EUROPP, 18 February The crisis that hit members of the Eurozone a decade ago has often been attributed to design flaws in Europe’s Economic and Monetary Union. Drawing on a new study, Andreas Bieler, Jamie Jordan and Adam David Morton argue that this …Read More

Maik Schmeling, Christian Wagner , (2019), “Central bank tone moves asset prices”, VoxEU, 22 February According to Ben Bernanke, “monetary policy is 98% talk and 2% action”.Using data on policy rate announcements and press conferences by the ECB between 1999 and 2017, this column shows that central bank tone affects asset prices, even after controlling for policy actions and economic fundamentals. The results are consistent with the idea that communication tone …Read More

Marcus Ashworth, (2019) “ECB Is Awake and Asleep at the Same Time”, Bloomberg Opinion, 19 February The European Central Bank has become the Schroedinger’s cat of global monetary policy. It has managed to be both awake and asleep at the same time. Three senior policy makers signaled concerns over euro-area growth in recent days. At last, officials are finally alive to the risks that the bloc’s situation has become serious. …Read More

Marco Buti, Maya Jollès, Matteo Salto, (2019) “The euro – a tale of 20 years: The priorities going forward”, VoxEU, 19 February The launch of the Economic and Monetary Union in 1999 was a considerable challenge and a historic milestone. The first decade of its existence firmly established the euro as a credible construction. As this column describes, however, from 2008 onwards the economic and financial crisis in Europe laid …Read More