Germán García Mellado (A&G) | Regarding interest rates, we expect a 50 basis point rise for Thursday’s meeting, placing the deposit facility at 2%. We do not believe that Lagarde will specify the steps to be taken for the first meetings in 2023 or detail the terminal rate of this cycle of rate hikes. She will therefore maintain a stance similar to that shown since the post-summer meetings, in which…
Fernando González Urbaneja | The ECB’s non-binding considerations on the “temporary levy on banks (an economic benefit that is not a tax) could have merited a silent response from the government, an “informed but not concerned” or something similar, but they have produced an irritation with disqualifications and scorn that can only be the result of irresistible arrogance. It is well known that this government, especially the president, does not…
The opinion of the European Central Bank (ECB) on the new bank tax, which is currently before Congress, is already public. The banking supervisor has issued a tough and detailed opinion in which it warns of the negative effects that the tax, as it is designed, could have on the banking sector, such as damage to profitability, competition, solvency and the granting of credit, while warning of the risks of…
ifo President Clemens Fuest has welcomed the European Central Bank’s decision to raise interest rates. “Better late than never,” he said in Berlin on Thursday. “The 0.75 percent increase is a step in the right direction. Nevertheless, monetary policy remains very expansionary. Over the coming months, further interest rate increases will have to follow. Interest rates are still very low, and private households’ inflation expectations are constantly climbing higher. The…
Crédito y Caución (Atradius) | High inflation is the current hot economic topic. In June, inflation was running at over 11% in the Netherlands1; for the eurozone it was nearly 9%, which is surely a record. It is also sure that the inflationary bite is being felt, particularly in the purchasing power of lower income groups. The question is, how long will this high inflation last? In recent months, energy…
J.P. Marín-Arrese |Christine Lagarde announced the first rate hike in a decade as an upfront offensive against inflationary pressures. While no one doubts this tightening aims at cutting short the current price race, the claim that it is an early reaction fails to match the records. For more than a year, all advanced economies have witnessed soaring prices. Yet, the ECB dismissed this trend as a temporary mismatch betwen demand…
The ECB confirms that it will remain present in the primary via re-investments. Also that the ESG strategy of the CSPP will arrive by the end of the year. In an explanatory note, the ECB confirms one of the doubts that continued to circulate among investors with the end of the CSPP’s net purchases (today): what its role would be after taking on a leading role in the primary market…
Link | The governor of the Central Bank of France and member of the ECB’s Governing Council, François Villeroy de Galhau, said in an interview yesterday that the tool being designed by the ECB to prevent fragmentation in the eurozone must send a message that there will be no limits. The more credibility it has, he said, the less it may have to be used. Villeroy defended the sale of…
Lidia Conde (Francfort) | explains Marcel Fratzscher, president of the DIW (Berlin Institute for Economic Research) who headed the ECB’s International Economic Policy Analysis Department in 2008-2013. In an interview to be published in this month’s issue of Consejeros magazine, Fratzscher explains that “The ECB is habdicapped because it cannot tacle the problem by raising rates, neither this year nor the next”, which is why “I am not in favour…
Fernando González Urbaneja | Uncertainty, volatility, acceleration… these are common concepts, clichés in any economic presentation that abound these days. We have seen it all in real time over the last few hours. Inflation rates soaring to almost double-digit levels over the last few months have put the (independent and competent) central banks and their monetary strategies on the spot. Inflation is a monetary issue, therefore the responsibility of the…