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This document provides an overview of public hearings and exchange of views with the Chair of the European Central Bank (ECB) Supervisory Board in the ECON Committee since July 2019. It also provides an overview of all external papers requested by the ECON Committee by a standing panel of banking experts. Lastly, the annex contains an overview of the respective legal bases for these hearings as part of the accountability framework of the Single Supervisory Mechanism (SSM). For an overview of public ...

This note is prepared in view of a regular public hearing with the Chair of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, which will take place on 14 October 2021. The briefing addresses: 1) Emerging risks in the banking group, as presented to the Eurogroup, 2) results of EBA’s and ECB’s 2021 stress test exercises, 3) the Basel Committee report on early lessons from the Covid-19 pandemic on the Basel reforms, 4) the ECB report on sanctioning activities, 5) the ECB Supervisory ...

In July 2021, the European Central Bank (ECB), the central bank of the 19 European Union countries that have adopted the euro, completed its first monetary policy strategic review for 18 years. The key change, after 18 months of consultation, was a new interpretation of price stability (the ECB's primary objective) as a symmetric inflation rate of 2 % over the medium term. The aim of this year's review was to adapt monetary policy and central banking to broader macroeconomic trends, such as digitalisation ...

This paper provides an overview of current initiatives and actions aiming at reinforcing the anti-money laundering (AML) supervisory and regulatory framework in the EU, in particular from a Banking Union perspective. This briefing first outlines the EU framework for fighting money laundering, which includes legislation (most notably the 5th AML Directive) and a number of Commission and Council Action Plans. Secondly, an overview of AML prevention relevant authorities, at both the EU and national ...

This in-depth analysis provides evidence on differences in the practice of supervising large banks in the UK and in the euro area. It identifies the diverging institutional architecture (partially supranationalised vs. national oversight) as a pivotal determinant for a higher effectiveness of supervisory decision making in the UK. The ECB is likely to take a more stringent stance in prudential supervision than UK authorities. The setting of risk weights and the design of macroprudential stress test ...

Several central banks, including the European Central Bank since 2014, have added negative policy rates to their toolboxes after exhausting conventional easing measures. It is essential to understand the effects on the economy of prolonged negative rates. This paper explores the potential effects (and side effects) of negative rates in theory and examines the evidence to determine what these effects have been in practice in the euro area. This paper was provided by the Policy Department for Economic ...

Negative interest rate policies (NIRP) have become an established monetary policy instrument in the toolkit of the ECB. We discuss NIRP in the euro area based on theoretical considerations and available empirical evidence. We find that NIRP had some positive impact on loan growth and investment in the euro area, but that the room to further loosen monetary policy via NIRP may be small. NIRP is discussed also in the context of the general monetary policy environment. This paper was provided by ...

Policy rate cuts in negative territory have increased credit supply and improved the macroeconomic environment similar to cuts in positive territory. Dreaded disruptions to the monetary policy transmission channels as well as adverse side effects on bank profitability have so far largely failed to materialise. Thus, the evidence available today shows that the negative interest rate policy is an effective policy tool. However, systemic risks, including in the non-bank sector, should be closely monitored ...

This note is prepared in view of a regular public hearing with the Chair of the Supervisory Board of the European Central Bank (ECB), Andrea Enria, which will take place on 1 July 2021. The briefing addresses (i) the ECB’s TRIM Project Report, (ii) data on significant banks’ holdings of sovereign debt, (iii) the ECB’s publication on banks’ recovery plans, (iv) the ECB’s Supervisory banking statistics for the fourth quarter of 2020, (v) the ECB consultation on revised “fit & proper” guidance, (vi ...

This paper shows that larger banks and better capitalised banks invest more in computer software. These findings could reflect that larger banks can attain greater benefits from computer software and that better capitalised banks have more resources to make larger software investments. All the same, smaller and less capitalised banks will also have to make substantial software investments to maintain sustainable businesses, something that supervisors will need to point that out to these banks.