European Central Bank (ECB)
A vaccine for the global economy
Olivier Blanchard, Peter Praet and Daniel Alpert discuss shorter- and longer-term actions to tackle the flaws exposed by the Covid-19 crisis
Major economies already engaging in ‘currency wars’ – former IMF chief
De Larosière floats new commodity-based exchange rate regime; says “trust” is key to avoiding “beggar-thy-neighbour” policies
The dawn of a safer and sounder European banking sector
Implementation of two pillars of banking union has led to significant improvements in the safety and soundness of the European banking system
ECB temporarily relaxes NPL regulation
Central bank estimates lower capital requirements will release €120 billion for lending
ECB’s negative rates boosted lending – Bank of Italy paper
Banks increased credit to ex ante riskier firms, but did not see rise in failed loan rates, researchers find
ECB launches €750bn emergency purchase programme
Governing council says new tool will remain active until Covid-19 crisis is over, stands ready to increase it
Central banks activate contingency plans amid Covid-19 pandemic
Rotating and remote team working aims to reduce contagion risk
Central banks and banks: a changed relationship
The development of large, complex international capital markets has reshaped the relationship between central banks and their commercial counterparts
Fed cuts rates 100bp as central banks launch joint action
US central bank unveils unprecedented coronavirus response package as global swap lines are bolstered through co-ordinated action
ECB strongly criticised by French and Italian leaders
Lagarde’s words spark Italian anger while Macron says first ECB measures are not sufficient
Lagarde misstep overshadows ‘bold’ measures, analysts say
ECB president seemed to have hampered governments’ debt financing at a critical juncture
ECB lowers capital levels as EBA postpones stress tests
Coronavirus response sees ECB loosen limits for largest banks while EBA calls for supervisory flexibility
Lagarde seems to stumble as ECB announces coronavirus response
ECB announces more QE, expanded financing and loosening of banks’ capital and liquidity buffers
ECB likely to shy away from rate cut, analysts say
Central bank expected to unveil targeted measures to support banks and SMEs
Covid-19 unleashes major market shock
Oil prices tumble, dragging down stock markets worldwide; sovereign bonds rally
FedNow: the advantage of going last
While the Fed is late in developing instant payments, it can learn about fraud detection, interconnectivity and directory services strategies from Europe, the UK and Australia
Tough inspections help cut zombie lending, paper finds
Checking banks’ assessments of asset quality cut loans to non-viable firms – Bank of Portugal paper
What can the ECB do now?
Central bank is facing coronavirus shock with limited room for further policy measures
How could the coronavirus affect the world economy?
Central banks may lack firepower, while public health readiness differs sharply between countries
IMF-World Bank spring meetings to go virtual
Institutions opt not to bring thousands of delegates to Washington, DC, but key meetings and document releases will go ahead
ECB’s asset purchases had global spillovers – IMF research
Eurozone investors significantly rebalanced into foreign advanced-economy securities, researchers find
ECB mulls wider clearing house access to account facilities
Including CCPs in the Eurosystem may remove the need for them to seek a banking licence
G7 leaders avoid committing to co-ordinated virus response
Central bankers and finance ministers “stand ready”; Carney says BoE has launched contingency measures
Eurozone inflation falls to 1.2% in February
Lower energy prices were the main factor behind the decline, core inflation edged slightly higher