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Climate changes risks

European economy 23rd March 2022

No European Bank Meets The ECB’s Expectations On Climate Risk Reporting

Fernando Rodríguez | “Although there have been improvements since the first assessment at the end of 2020, no bank fully meets supervisory expectations” on environmental and climate risk reporting, according to the latest report of the European Central Bank (ECB) with data analyzed as of November 2021 on 109 entities under direct supervision. Although more than 70% of banks provide information on how their boards of directors monitor these risks…

104415914 GettyImages 670697906.1910x1000

European economy 10th March 2022

The ECB policy decision had a hawkish tilt

Peter Goves, MFS Investment Management | Despite acknowledging the uncertainty stemming from the Ukraine conflict, the ECB policy decision had a hawkish tilt. Indeed, the ECB chose to wind down the APP schedule more quickly than the December guidance and revised its rate guidance. The ECB also tweaked its guidance and removed a previous dovish bias which referenced the prospect of rates remaining at present or lower levels. The market…

lagarde

European economy 10th February 2022

Talking Down Inflation

Juan Pedro Marín-Arrese | Christine Lagarde is trying to convince the markets of the ECB’s strong determination to tame the current inflationary bout. To avoid having its reputation as caretaker of price stability tarnished, the ECB has to reverse the benign neglect shown up to now. Yet, Lagarde is conscious of the narrow scope monetary policy has when dealing with supply-side cost hikes. Thus, rather than taking the pivotal action…

Christine Lagarde IMF director

European economy 3rd February 2022

ECB: The Eurozone Is Not The US And The Output Gap Is Still Closing

Annalisa Piazza (MFS IM) | Despite no changes in the policy stance, the tone of the press conference was clearly more hawkish than anticipated. Lagarde noted that risks around inflation are skewed to the upside, especially in the short-term and the March projections on inflation will set the stage for future policy moves. Recent inflation developments are a reason of concern across the Governing Council as second round effects from…

Lagarde Powell

World economy 18th December 2021

A Tale of Two Central Banks

J.P. Marín Arrese | Charles Dickens opens his novel by describing the contrast between the sedate life in London and the bloody spasms shaking Paris under the Revolution with the famous sentence: ‘It was the best of times, it was the worst of times…’. While the current economic scenario bears little in common with the dramatic events described by the prominent author, we enjoy a robust recovery but face an…

ECB PPEP

European economy 28th October 2021

BCE | Policy Was Left Unchanged At Today’s Meeting

Allen Goves (MFS Investment Management) | Policy was left unchanged at today’s meeting, as widely expected, yet despite rising inflation. This is because of the ECB’s stress that the current rise in inflation is likely to be transitory. Growth is still considered strong but is moderating and risks are broadly balanced. This meeting was perhaps characterized by its emphasis on inflation drivers. Importantly, the ECB continues to stress that many…

euro digital currency

Spanish economy 26th October 2021

The ECB Chooses Three Executives From BBVA, CaixaBank And Bizum For Its ‘Council Of Wise Men’ On The Digital Euro

The council is composed of 30 members (23 men and seven women), all of whom come from the business community. BBVA will be represented by Antonio Macías Vecino, who has been in charge of payments policy at the bank since June 2020.Caixabank by Fanny Solano, head of market regulation, digital and retail banking, and Bizum by Fernando Rodríguez Ferrer, who has been responsible for business development since January 2017.

ECB bonds

European economy 20th September 2021

ECB Members Show Their Concern About Inflation

Francisco Vidal (Intermoney) | For yet another day, the spotlight is on the words of ECB members. They give their views on their particular vision of the course of inflation, with the consequent impact on the markets. And the latter react by interpreting the statements in terms of the central bank’s speed in withdrawing its stimuli. On Thursday, the Financial Times reported Philip Lane had said privately that they expect…

ECB PPEP

European economy 14th September 2021

Will Lagarde Dare To Move In Earnest?

JP Marín-Arrese | All was quiet on the ECB front for too long. Suddenly, last week it announced its intention to scale down the emergency asset-buying programme starting next month. While falling short of the tapering heralded weeks ago by Jerome Powell, it represents indeed a shift in the dull do-nothing approach followed for months and years. Once embracing quantitative easing, much later than other central banks, it proved unable…

ECB's president Christine Lagarde

European economy 11th September 2021

ECB ‘recalibrates’ PEPP for Q4 – December is now key for APP and TLTROs

Annalisa Piazza (MFS) | ECB “recalibrates policy”: Nothing else has changed. Indeed, the rest of the policy announcement was a carbon copy of what we heard back in July. Forward guidance on both rates and QE was confirmed, along with the re-investment programmes. The slower pace of PEPP had been widely flagged by ECB officials over the past few weeks so the announcement was hardly a surprise. That said, the…