Digital euro
The Eurosystem is preparing for the potential issuance of a digital euro to complement physical cash.
SPEECH
2 July 2026
Accelerating the green transition
Accelerating the green transition can strengthen Europe’s resilience, boost its energy security and support price stability, says Executive Board member Frank Elderson. Its reliance on imported fossil fuels makes it vulnerable to economic shocks and inflation volatility.
Read Frank Elderson’s speech
THE ECB BLOG
7 July 2026
Climate in ECB’s collateral framework
The ECB is now addressing potential financial losses linked to climate-related uncertainties in its collateral framework. Its new climate factors ensure firms’ vulnerability to transition shocks are considered when assessing the value of corporate bonds used as collateral.
Read The ECB Blog
PODCAST
7 July 2026
AI and your future
What does AI mean for your job, our economy and Europe’s future? In this episode, Stefania Secola speaks to Ronnie Chatterji – Chief Economist at OpenAI – about AI adoption, inequality, competition and whether the technology can become a force for broad-based prosperity.
Listen to the latest episode of Euro Matters- 3 July 2026
- EURO AREA ECONOMIC AND FINANCIAL DEVELOPMENTS BY INSTITUTIONAL SECTOR (EARLY)
- 3 July 2026
- MFI INTEREST RATE STATISTICS
- 3 July 2026
- BALANCE OF PAYMENTS (QUARTERLY)
- 30 June 2026
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 30 June 2026
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 30 June 2026
- PRESS RELEASEAnnexes
- 30 June 2026
- PRESS RELEASE
- 6 July 2026
- Dinner speech by Philip R. Lane, Member of the Executive Board of the ECB, at the Closing Conference of the European System of Central Banks Research Network on Challenges for Monetary Policy Transmission in a Changing World (ChaMP)[1]
- 2 July 2026
- Slides by Piero Cipollone, Member of the Executive Board of the ECB, at the Generali Executive Series in Milan, Italy
- 2 July 2026
- Keynote speech by Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, at the 7th World Congress of Environmental and Resource Economists
- 29 June 2026
- Introductory speech by Christine Lagarde, President of the ECB, at the ECB Forum on Central Banking 2026 “Shaping Europe's future: innovation, growth and stability” in Sintra, Portugal
- 27 June 2026
- Slides by Isabel Schnabel, Member of the Executive Board of the ECB, at the Petersberger Sommerdialog in Königswinter, Germany
- 2 July 2026
- Interview with Christine Lagarde, President of the ECB, conducted by Guillaume Benoit and Christophe Jakubyszyn on 24 June 2026
- 25 June 2026
- Interview with Isabel Schnabel, Member of the Executive Board of the ECB, conducted by Mark Schieritz and Kolja Rudzio on 19 June 2026
- 10 June 2026
- Interview with Frank Elderson, Member of the Executive Board of the ECB and Vice-Chair of the Supervisory Board of the ECB, conducted by Daan Ballegeer and Rutger Betlem on 19 May 2026
- 31 May 2026
- Interview with Luis de Guindos, Vice-President of the ECB, conducted by Andrés Stumpf on 27 May 2026
- 26 May 2026
- Interview with Philip R. Lane, Member of the Executive Board of the ECB, conducted by Shogo Akagawa and Shiori Goso on 19 May 2026
- 7 July 2026
- The ECB is now addressing potential financial losses linked to climate change in its collateral framework. Its new climate factors ensure that firms’ vulnerability to transition shocks are considered when assessing the value of corporate bonds used as collateral in lending to banks.
- 2 July 2026
- How vulnerable is the global economy to trade disruption in the Strait of Hormuz? Using scenario-based analyses, this blog shows that supply shortages can affect growth and inflation beyond the impact on global energy prices.Details
- JEL Code
- E01 : Macroeconomics and Monetary Economics→General→Measurement and Data on National Income and Product Accounts and Wealth, Environmental Accounts
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
F10 : International Economics→Trade→General
- 24 June 2026
- The adoption rate of AI is rising rapidly, but the intensive use that drives transformation and generates macroeconomic gains remains rare. This blog explores what sets intensive AI users apart and what firms need to deeply integrate AI into their production processes.
- 3 June 2026
- The current energy shock is significant and global, but it is also hitting a euro area economy that is more balanced than when Russia invaded Ukraine in early 2022. History and analysis show that context matters a lot for how shocks propagate to inflation.Details
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
- 2 June 2026
- The euro’s international use has grown in recent years, but largely by circumstance rather than by design. In a more contested global monetary system, Europe needs to act deliberately to strengthen the role of its currency.EnglishOTHER LANGUAGES (15) +Details
- JEL Code
- E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
- 7 July 2026
- WORKING PAPER SERIES - No. 3250Details
- Abstract
- We construct an index of geopolitical and geoeconomic tension for the euro area using Large-Language Models (LLMs) that prompt a large dataset of European, local-language newspaper articles. The resulting LLM Geoeconomic and Geopolitical Tension (LGPT) index and its subindices seek to provide an accurate narrative of tensions and their sources over the past quarter century. The multilingual LLM approach allows for a separation between geopolitical and geoeconomic tensions and for granularity in the identification of the source of such tensions including trade, energy and finance. This lends itself to more accurate economic analysis of the impact of geopolitics and geoeconomics on the euro area economy. The LLM approach is efficient and capable among other things of extracting trends regarding the international institutional actors involved in developments. We also illustrate one potential use of the index by estimating the impact of geoeconomic tensions on output and inflation in the euro area in a Bayesian structural VAR framework.
- JEL Code
- C43 : Mathematical and Quantitative Methods→Econometric and Statistical Methods: Special Topics→Index Numbers and Aggregation
C45 : Mathematical and Quantitative Methods→Econometric and Statistical Methods: Special Topics→Neural Networks and Related Topics
N40 : Economic History→Government, War, Law, International Relations, and Regulation→General, International, or Comparative
H56 : Public Economics→National Government Expenditures and Related Policies→National Security and War
C30 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→General
- 7 July 2026
- WORKING PAPER SERIES - No. 3249Details
- Abstract
- We quantify barriers to cross-border bank lending to firms within the euro area and their consequences for credit allocation and output. Using loan-level data from the European credit registry (AnaCredit) and group structures (RIAD),we estimate barriers to relationship formation, loan pricing, and banks’ branching decisions at the country-pair level. We find that barriers to cross-border relationships between banks and firms and cross-border bank entry are large while wedges on interest rates and loan quantities are comparatively small. The estimated wedges are strongly associated with differences in national banking regulations, measured using a novel dataset on regulatory distances. We embed our estimates into a quantitative spatial general equilibrium model with heterogeneous banks and firms subject to cross-border frictions in relationship formation, loan pricing, and bank entry. Partially relaxing frictions predicts sizable and heterogeneous output gains across euro area countries. These gains are primarily driven by increases in capital and labor rather than improvements in allocative efficiency.
- JEL Code
- F36 : International Economics→International Finance→Financial Aspects of Economic Integration
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
O16 : Economic Development, Technological Change, and Growth→Economic Development→Financial Markets, Saving and Capital Investment, Corporate Finance and Governance
- 6 July 2026
- SURVEY OF MONETARY ANALYSTS
- 6 July 2026
- OCCASIONAL PAPER SERIES - No. 393Details
- Abstract
- This paper surveys research from the ESCB ChaMP Research Network on how ongoing structural change is affecting monetary policy transmission in the euro area. It shows that transmission is state-dependent and varies systematically with changesin the sectoral composition of the economy, in its international integration, in financial conditions and in inflation regimes. More service-intensive economies exhibit weaker real responses to monetary tightening, while high-inflation environments areassociated with faster and stronger price pass-through, helping explain why the recent disinflation episode entailed relatively low output costs. The paper also shows that variations in leverage, supply shocks and energy-related disturbances alter theinflation-output trade-off and can make appropriate policy responses more contingent on the source and persistence of shocks. Finally, it reviews evidence that monetary policy can affect the supply side through innovation, reallocation and productivity, implying that structural change influences transmission and may itself be influenced by policy.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
- 6 July 2026
- OCCASIONAL PAPER SERIES - No. 392Details
- Abstract
- The repeated occurrence of supply-chain disruptions since the COVID-19 pandemic reveals the need to complement traditional macroeconomic frameworks with approaches that better capture the complexity of modern economic productionstructures. This paper synthesises the findings of the ChaMP Research Network, highlighting how production network models and heterogeneity across firms, sectors and countries enrich our understanding of monetary policy transmission. Bycapturing input-output relationships between firms and economic sectors, these approaches show how the propagation and persistence of shocks depend on network structure, the position of sectors within the network – where central sectorsexert disproportionate influence – and differences and variations in price and wage flexibility. The inflationary effects of supply shocks tend to be amplified, while the effects of demand shocks, including monetary policy shocks, are dampened. Inaddition, large shocks can give rise to nonlinearities, such as a steepening of the Phillips curve. This aligns with the conclusions of the ECB’s most recent strategy assessment, which emphasise the need to analyse the risks surrounding the inflationoutlook. The findings also point to the emergence of trade-offs between inflation and output gap stabilisation, as production networks and heterogeneity weaken the alignment between price and output dynamics. As a result, stabilising inflation andoutput simultaneously calls for astute fiscal policy. Overall, incorporating production networks provides a more nuanced and policy-relevant framework for designing state-contingent and data-informed monetary policy.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
D57 : Microeconomics→General Equilibrium and Disequilibrium→Input?Output Tables and Analysis
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
- 6 July 2026
- OCCASIONAL PAPER SERIES - No. 391Details
- Abstract
- The growing importance of non‑bank financial intermediaries (NBFIs) also has important implications for the transmission of monetary policy in the euro area. It alters the composition of credit supply and strengthens the role of market‑based finance for the corporate sector. In the aggregate, NBFIs tend to amplify the transmission of monetary policy within the financial sector. In particular, intermediaries with uninsured short‑term funding amplify monetary transmission to credit. This becomes particularly pronounced during episodes of financial stress, when liquidity pressures and valuation losses can trigger asset sales and spillovers to banks. By contrast, institutions that benefit from stable long-term funding, such as insurers, pension funds and certain specialised finance companies, may attenuate the transmission of monetary policy to credit, although only to a limited extent. The implications for monetary policy transmission arising from NBFIs also extend beyond lending, notab
- JEL Code
- G2 : Financial Economics→Financial Institutions and Services
G23 : Financial Economics→Financial Institutions and Services→Non-bank Financial Institutions, Financial Instruments, Institutional Investors
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
- 6 July 2026
- OCCASIONAL PAPER SERIES - No. 390Details
- Abstract
- This Occasional Paper reviews evidence from the ChaMP Research Network on the transmission of monetary policy to households in the euro area – an area of monetary policy that has attracted less attention among researchers. It highlights thecentral role of banks and non-bank intermediaries in shaping how policy affects borrowing, saving and consumption. Despite the overall effectiveness of monetary policy in the euro area, the pass-through of policy rates to household borrowingcosts is incomplete and heterogeneous, reflecting differences in funding structures, market power and institutional settings.A key insight is that transmission depends on household heterogeneity. Differences in balance sheets, credit access and housing market characteristics produce uneven effects across income, age and wealth groups, with important implications foraggregate demand and distributional consequences. Another key finding is that several components of consumption respond more rapidly to changes in interest rates than previously thought, especially in high-debt, variable-rate environments.Overall, the findings point to the need for an integrated, system-wide perspective that accounts for multiple aspects of financial structure and heterogeneity when assessing monetary policy transmission. ChaMP research also highlights the valueof readily available granular data, as many novel findings stem from a major coordinated effort to use new data on households obtained from national credit registers, as well as novel granular data on household expenditure.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E21 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Consumption, Saving, Wealth
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
- 6 July 2026
- OCCASIONAL PAPER SERIES - No. 389Details
- Abstract
- This Occasional Paper reviews evidence from the ChaMP Research Network on the transmission of monetary policy to firms in the euro area. Overall, transmission to firms remains effective, including during the 2022-23 tightening cycle. However, new results show that this transmission is neither uniform nor mechanical. The pass-through from policy rates and other instruments to corporate financing conditions is shaped by multiple layers of heterogeneity that may, in some cases, have aggregate implications. Country-level segmentation, linked to sovereign risk, institutional frameworks and local lending practices, plays an important role in shaping transmission, especially during periods of stress. Beyond cross-country effects, bank balance sheets and business models also influence transmission by affecting the strength of lending responses. In particular, the composition of banks’ liabilities can lead to different speeds of transmission. Firm characteristics further differentiate the impact of monetary policy, with the funding mix playing a critical role. At the contract level, collateralisation and interest rate fixation materially affect both the magnitude and composition of transmission. As some of these heterogeneities may, in certain circumstances, have aggregate implications, this paper explains how a broad and flexible toolkit, centred on the main policy rate and, when needed, complemented by other policy instruments such as asset purchases and targeted liquidity operations, can be deployed in a proportionate manner to ensure effective monetary policy transmission across a structurally diverse monetary union.
- JEL Code
- E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
- 26 June 2026
- OTHER PUBLICATION
- 25 June 2026
- ECONOMIC BULLETINEnglishOTHER LANGUAGES (18) +
- 25 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- This box examines the narrowing of the euro area current account surplus from 2.7% of GDP in 2024 to 1.7% in 2025. The decline was driven mainly by services trade and income flows and particularly by developments vis-à-vis the United States and China. For the United States, this reflected the role of US multinational enterprises, whose euro area affiliates supported goods exports but generated larger services and income deficits. Imports from China grew, especially in machinery and manufactured goods. AI-related goods had only a limited direct effect on the goods balance, but it is likely that rising AI adoption boosted imports of digital services. From a saving and investment perspective, the lower surplus reflected reduced net lending by non-financial corporations, owing to both lower saving and higher domestic investment needs. Overall, the euro area current account surplus is expected to remain below its 2024 level over the medium term.
- JEL Code
- E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
F23 : International Economics→International Factor Movements and International Business→Multinational Firms, International Business
F43 : International Economics→Macroeconomic Aspects of International Trade and Finance→Economic Growth of Open Economies
F62 : International Economics→Economic Impacts of Globalization→Macroeconomic Impacts
- 25 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- This box describes the Eurosystem liquidity conditions and monetary policy operations in the first and second reserve maintenance periods of 2026, from 11 February to 5 May 2026.
- JEL Code
- E40 : Macroeconomics and Monetary Economics→Money and Interest Rates→General
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 25 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- This box analyses the impact of prices of imports from China on euro area goods inflation. Inflation for China-exposed goods has been persistently lower than total goods inflation, with model-based estimates suggesting that shocks which bring down the prices of imports from China by 10% in exposed sectors reduce inflation by 0.1-0.7 percentage points in key categories such as furniture and appliances. A historical decomposition estimated over the period between January 2002 and April 2026 shows that, cumulatively, import price shocks from China reduced goods inflation by 0.27 percentage points by April 2026, with delayed effects from the appreciation of the euro in 2025 further dampening goods inflation.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
F14 : International Economics→Trade→Empirical Studies of Trade
- 25 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- This box examines whether large-scale restructuring announcements recorded in the European Restructuring Monitor (ERM) compiled by Eurofound contain economically meaningful signals of euro area labour market dynamics. We construct a net job changes indicator, demonstrating that its lagged values contain information on episodes of below-average employment performance ahead of official data releases. While ERM coverage is limited by construction, focusing on large firms and manufacturing-intensive sectors, it captures restructuring events in firms employing between one-third and one-half of the total euro area workforce, making it a timely complement to standard aggregate statistics.
- JEL Code
- C22 : Mathematical and Quantitative Methods→Single Equation Models, Single Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models &bull Diffusion Processes
E24 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Employment, Unemployment, Wages, Intergenerational Income Distribution, Aggregate Human Capital
- 25 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- This box assesses how energy supply disruptions associated with geopolitical shocks are transmitted to US financial markets, leveraging on the indicator developed by Iacoviello and Tong (2026). Whereas negative geopolitical events typically reduce output, they are ambiguous with respect to inflation. However, those that also constrain global oil supply are inflationary and lead to deeper recessions. In these cases, stock prices fall more persistently, the dollar appreciates markedly, and risk metrics such as corporate bond spreads increase and remain elevated. This pattern is driven by oil price dynamics: instead of falling, as they would if supply were unaffected, oil prices rise sharply and persistently. Applying model-implied elasticities to the war in the Middle East which started in February 2026 suggests that markets have reacted only moderately to the shock. This may reflect confidence in the robustness of the US economy or expectations that the conflict will be short-lived, but it also leaves markets vulnerable to abrupt repricing if these assumptions prove wrong.
- JEL Code
- G15 : Financial Economics→General Financial Markets→International Financial Markets
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
F51 : International Economics→International Relations, National Security, and International Political Economy→International Conflicts, Negotiations, Sanctions
- 24 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- Oil supply disruptions related to the war in the Middle East have triggered a sharp rise in oil prices, posing headwinds for euro area economic activity. This box assesses the macroeconomic effects of the shock using a Bayesian vector autoregressive model with identified geopolitical oil supply shocks. The results suggest that supply-driven oil price increases associated with geopolitical events have a persistent negative effect on euro area growth, operating through lower private consumption and investment. Historical evidence from past geopolitical oil supply disruptions indicates that the current shock is likely to weigh noticeably on euro area growth, although the magnitude of the effects remains uncertain and will depend on the future path of oil prices and the evolving geopolitical situation.
- JEL Code
- C32 : Mathematical and Quantitative Methods→Multiple or Simultaneous Equation Models, Multiple Variables→Time-Series Models, Dynamic Quantile Regressions, Dynamic Treatment Effect Models, Diffusion Processes
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
Q43 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Energy→Energy and the Macroeconomy
- 24 June 2026
- CONVERGENCE REPORTRelated
- 24 June 2026
- PRESS RELEASEEnglishOTHER LANGUAGES (21) +
- 23 June 2026
- ECONOMIC BULLETIN - BOXEconomic Bulletin Issue 4, 2026Details
- Abstract
- State aid expenditure in the EU has risen in recent years against the background of economic shocks such as the COVID-19 pandemic, Russia’s unjustified war against Ukraine and, most recently, the crisis in the Middle East, as well as a global resurgence of interventionist industrial policy. While traditionally aimed at addressing market failures and achieving policy objectives like regional cohesion and environmental transition, State aid has increasingly shifted towards supporting industrial competitiveness, decarbonisation and strategic resilience. This box provides first evidence of this evolution, while further analysis is warranted on how State aid can effectively support shared EU objectives and new industrial priorities while safeguarding competition within the Single Market and maintaining fiscal sustainability.
- JEL Code
- H25 : Public Economics→Taxation, Subsidies, and Revenue→Business Taxes and Subsidies
H81 : Public Economics→Miscellaneous Issues→Governmental Loans, Loan Guarantees, Credits, Grants, Bailouts
L52 : Industrial Organization→Regulation and Industrial Policy→Industrial Policy, Sectoral Planning Methods
E62 : Macroeconomics and Monetary Economics→Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook→Fiscal Policy
D62 : Microeconomics→Welfare Economics→Externalities
- 23 June 2026
- ECONOMIC BULLETIN - ARTICLEEconomic Bulletin Issue 4, 2026Details
- Abstract
- The Survey of Monetary Analysts (SMA) is a valuable information set for understanding the expectations of financial market participants regarding monetary policy and macroeconomic developments in the euro area. This article reviews the evolution of the SMA over the past five years, highlighting key development milestones, including changes to the panel, questionnaire and analytical use of the survey. It explains how SMA data enhance regular monetary policy assessments and the understanding of expectation formation. In particular, the links between the expected policy rate path and the macroeconomic expectations of respondents provide structured insights into the views of the analysts. This has proven to be particularly valuable during periods of economic uncertainty, including during the post-pandemic surge in inflation and the subsequent period of disinflation. The article also evaluates the forecast accuracy of the SMA, as well as the disagreement among respondents, and the dispersion of their macroeconomic expectations.
- JEL Code
- E5 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
- 23 June 2026
- RESEARCH BULLETIN - No. 144Details
- Abstract
- The fact that monetary policy tightening has stronger effects than easing is a longstanding puzzle in monetary economics. This article studies monetary transmission in settings where firms face multiple financing constraints – a common and well-documented feature of corporate financing. Our theory shows that the multiplicity of financing constraints notably dampens the transmission of expansionary policy to firm borrowing and investment, while amplifying the transmission of policy tightening. This asymmetry arises because, when policy tightens, the most responsive constraint binds; whereas, when policy eases, the least responsive constraint limits the expansion of borrowing. We find strong empirical support for these predictions. Moreover, embedding the mechanism in a standard New Keynesian framework, we find that the decline in aggregate investment following contractionary monetary shocks is twice as large as the increase following equally sized expansionary shocks.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
D25 : Microeconomics→Production and Organizations
E22 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→Capital, Investment, Capacity
E44 : Macroeconomics and Monetary Economics→Money and Interest Rates→Financial Markets and the Macroeconomy
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
Interest rates
| Deposit facility | 2.25 % |
| Main refinancing operations (fixed rate) | 2.40 % |
| Marginal lending facility | 2.65 % |
Inflation rate
More on inflationExchange rates
| USD | US dollar | 1.1433 | |
| JPY | Japanese yen | 185.09 | |
| GBP | Pound sterling | 0.85411 | |
| CHF | Swiss franc | 0.9218 |
Financial stability
Our tasks Institutional framework Financial Stability Review Macroprudential policy measuresMarket operations
Open market operations Asset purchase programmes Lendings of holdings under PSPPNOT AN EXPERT? CHECK OUT OUR EXPLAINERS
LEARN MORE
What is the European Central Bank?