Digital euro
The Eurosystem is preparing for the potential issuance of a digital euro to complement physical cash.
INSERTED BY ANONYMOUS PROXY
Civil war declaration: On April 14th and 15th, 2012 Federal Republic of Germany "_urkenstaats"s parliament, Deutscher Bundestag, received a antifiscal written civil war declaration by Federal Republic of Germany "Rechtsstaat"s electronic resistance for human rights even though the "Widerstandsfall" according to article 20 paragraph 4 of the constitution, the "Grundgesetz", had been already declared in the years 2001-03. more
PUBLICATION
21 July 2026
Bank lending survey results – Q2 2026
Credit standards tightened moderately for firms amid higher perceived risks. Business loan demand rose slightly, while household loan demand decreased. Credit standards tightened most in sectors such as the car industry and energy-intensive manufacturing.
Read the bank lending survey
PUBLICATION
20 July 2026
Lending conditions tightened
In the second quarter of 2026, firms reported a further net tightening of bank loan interest rates and other lending conditions. They expected selling prices, input costs and wages to moderate slightly. Inflation expectations remained stable.
See the survey results
PODCAST
21 July 2026
Ask the ECB Forum: AI, money and euro adoption
At the ECB Forum on Central Banking in Sintra, we asked leading experts to tackle some of the questions asked by our listeners. Find out what they had to say in the latest What the Euro?! episode.
Listen to the Euro Matters podcast- 21 July 2026
- PRESS RELEASE
- 21 July 2026
- WEEKLY FINANCIAL STATEMENTEnglishOTHER LANGUAGES (22) +Annexes
- 21 July 2026
- WEEKLY FINANCIAL STATEMENT - COMMENTARY
- 21 July 2026
- PRESS RELEASE
- 20 July 2026
- PRESS RELEASE
- 17 July 2026
- BALANCE OF PAYMENTS (MONTHLY)
- 17 July 2026
- Lecture by Piero Cipollone, Member of the Executive Board of the ECB, at the Annual Meeting of the Federation of Italian Cooperative Credit Banks (Federcasse)
- 13 July 2026
- Slides by Isabel Schnabel, Member of the Executive Board of the ECB, at the Annual Economic Reception of the Deputy Minister-President of North Rhine-Westphalia in Münster, Germany
- 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
- 15 July 2026
- Interview with Piero Cipollone, Member of the Executive Board of the ECB, conducted by Élisabeth Montaufray-Bureau on 10 July 2026
- 13 July 2026
- Interview with Piero Cipollone, Member of the Executive Board of the ECB, conducted by Ricardo Jesus Silva on 29 June 2026
- 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
- 15 July 2026
- Global trade tensions have become a significant source of risk for firms with cross-border business. This post looks at corporate loans and survey data on bank lending conditions to examine how banks have adjusted their lending policies in response.Details
- JEL Code
- G20 : Financial Economics→Financial Institutions and Services→General
B17 : History of Economic Thought, Methodology, and Heterodox Approaches→History of Economic Thought through 1925
- 13 July 2026
- Chinese e-commerce platforms have become increasingly popular in the euro area. An ECB survey shows that shoppers are attracted by low prices and a wide product range. However, concerns about quality, trust and environmental consequences deter non-users.Details
- JEL Code
- F10 : International Economics→Trade→General
F40 : International Economics→Macroeconomic Aspects of International Trade and Finance→General
L81 : Industrial Organization→Industry Studies: Services→Retail and Wholesale Trade, e-Commerce
- 10 July 2026
- The ECB is upgrading its economic modelling to cope with growing uncertainty in a time of war and energy shocks. This ECB Blog highlights the limitations of the current toolkit and looks at where modelling is now heading.Details
- JEL Code
- C50 : Mathematical and Quantitative Methods→Econometric Modeling→General
E50 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→General
- 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
- 21 July 2026
- EURO AREA BANK LENDING SURVEYAnnexes
- 21 July 2026
- EURO AREA BANK LENDING SURVEY - ANNEX
- 20 July 2026
- SURVEY ON THE ACCESS TO FINANCE OF ENTERPRISES IN THE EURO AREAAnnexes
- 20 July 2026
- SAFE QUESTIONNAIRE
- 15 July 2026
- WORKING PAPER SERIES - No. 3256Details
- Abstract
- We study the evolution of bank branch networks in ten CESEE countries between 2013 and 2021. Using a manually compiled dataset of all branches and their geocoordinates, we document a decline exceeding 30%, with substantial heterogeneity across and within countries. We show that banking market consolidation is a key driver of closures, while profitability and local economic growth mitigate them. Branches in highly urban or very rural areas close more often. Competitive effects are nonlinear: moderate clustering lowers closure risk, but intense competition increases it. These patterns differ markedly across CESEE banking systems during the entire period we analyze.
- JEL Code
- D53 : Microeconomics→General Equilibrium and Disequilibrium→Financial Markets
G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
R12 : Urban, Rural, Regional, Real Estate, and Transportation Economics→General Regional Economics→Size and Spatial Distributions of Regional Economic Activity
- 15 July 2026
- WORKING PAPER SERIES - No. 3255Details
- Abstract
- We investigate the supply and demand drivers of bank deposit pricing in the Euro area during the period 2007–2024. We document that the pass-through of policy rates to sight deposit rates is low, asymmetric, varies across the monetary policy regimes, and decreases over time. We build and estimate an equilibrium model of bank deposit markets, and find that the price sensitivity of depositors exhibits large heterogeneity between households and firms, across countries, and over time. Our estimates suggest that rate-sensitive depositors increasingly switched to alternative, higher-yielding savings products over time, thereby decreasing the average rate-sensitivity of the remaining pool of sight deposits. In turn, banks’ market power over sight deposits increased, thereby accounting for the sluggish increase in overnight deposit rates following the 2022 European Central Bank’s policy rate hikes.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
E43 : Macroeconomics and Monetary Economics→Money and Interest Rates→Interest Rates: Determination, Term Structure, and Effects
- 14 July 2026
- WORKING PAPER SERIES - No. 3254Details
- Abstract
- We study the short-run macroeconomic transmission of a US–China tariff war in an open economy multi-sector New Keynesian model with input–output linkages, sectoral nominal rigidities, and heterogeneous currency invoicing. A reciprocal 10 percentage-point tariff increase generates asymmetric incidence: the tariff-imposing country bears more of the inflationary burden, while the targeted country experiences the larger output contraction. Production networks amplify this contraction by propagating the shock beyond the directly tariffed bilateral margin. Currency invoicing further shapes transmission. Under heterogeneous invoicing, dollar-priced border prices weaken the expenditure-switching role of exchange rates, deepening the contraction in China relative to producer-currency pricing and altering third-country spillovers. The EA response is small in the aggregate, but only because positive trade-diversion margins are offset by weaker demand from China and multilateral adjustments. We then exploit the model’s sectoral structure by imposing tariffs on one Chinese sector at a time. Sectoral incidence is highly concentrated, but aggregate effects cannot be inferred from the directly tariffed sector alone: domestic propagation offsets own-sector gains in the US, reinforces own-sector losses in China, and leaves the EA as a net object shaped by opposing trade margins. The results show that tariff incidence depends jointly on where the tariff lands, how the shock propagates through production networks, and how invoicing governs border-price adjustment. A framework that combines these margins delivers a materially different assessment from one built on bilateral trade shares alone.
- JEL Code
- E31 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Price Level, Inflation, Deflation
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
E52 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Monetary Policy
F13 : International Economics→Trade→Trade Policy, International Trade Organizations
F41 : International Economics→Macroeconomic Aspects of International Trade and Finance→Open Economy Macroeconomics
F42 : International Economics→Macroeconomic Aspects of International Trade and Finance→International Policy Coordination and Transmission
- 14 July 2026
- DISCUSSION PAPER SERIES - No. 31Details
- Abstract
- We study the role of geoeconomics in shaping globalisation and trade policy. We first review the evolution of world trade since the end of World War II, highlighting the drivers of globalisation and its economic consequences. We then synthesise recent research on geoeconomics, which analyses how countries use trade policy as a tool to pursue geopolitical objectives. Against this background, we argue that the gradual shift in geoeconomic power from the United States toward China since the 2000s has been driving a fragmentation in world trade along geopolitical lines. We provide conceptual policy recommendations for the European Union to navigate an environment characterised by intensifying geopolitical competition.
- JEL Code
- F02 : International Economics→General→International Economic Order
F1 : International Economics→Trade
F4 : International Economics→Macroeconomic Aspects of International Trade and Finance
F5 : International Economics→International Relations, National Security, and International Political Economy
F6 : International Economics→Economic Impacts of Globalization
- 13 July 2026
- WORKING PAPER SERIES - No. 3253Details
- Abstract
- We show that an unexpected tightening of the EU Emissions Trading System led high-emission-intensity firms to cut emissions relative to low-intensity peers within the same industry, without reducing output, thereby improving emission efficiency. Effects are stronger for power producers than for manufacturing firms. Examining mergers and acquisitions (M&As), we find that high-intensity manufacturing firms acquire more green targets after the tightening than low-intensity firms, with no change in the overall number of acquisitions, indicating a shift in focus rather than activity. Finally, we show that these green M&As contributed to the observed emission reductions over the study period.
- JEL Code
- D22 : Microeconomics→Production and Organizations→Firm Behavior: Empirical Analysis
G34 : Financial Economics→Corporate Finance and Governance→Mergers, Acquisitions, Restructuring, Corporate Governance
G38 : Financial Economics→Corporate Finance and Governance→Government Policy and Regulation
Q53 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Air Pollution, Water Pollution, Noise, Hazardous Waste, Solid Waste, Recycling
Q54 : Agricultural and Natural Resource Economics, Environmental and Ecological Economics→Environmental Economics→Climate, Natural Disasters, Global Warming
- 13 July 2026
- OCCASIONAL PAPER SERIES - No. 394Details
- Abstract
- This paper examines the implications of the provision, in the European Union, of bank-like services, including payment services, by large non‑bank groups (i.e. groups that do not comprise entities with a banking licence), and evaluates policy options to address the emergence of so-called neo-conglomerates by recalibrating the regulatory perimeter. Drawing on five EU case studies (a messaging app white‑label arrangement, a complex multi‑partner “super‑app” model, a systemic payment group, a borderless financial technology firm (fintech) and a bank) – this paper illustrates how financial services may be delivered through digital unbundling and re-bundling, embedded distribution and white‑label partnerships. It maps the business models, licensing structures, fintech partnership chains and data frictions that may obscure group‑wide risks and complicate home‑host supervisory cooperation. The cases were included for illustrative purposes only, and implying no judgement at all on the soundness or governance of the firms concerned, nor on the effectiveness or adequacy of the actions taken by the relevant supervisory authorities. The paper also identifies potential “blind spots” in the regulatory frameworks applicable at the time of writing and misalignments in prudential, conduct and operational objectives. Building on guidance from standard‑setting bodies and international organisations on supervisory approaches to financial innovation, fintech and Big Tech, the paper identifies four priority areas for consideration, with a view to limit regulatory arbitrage and systemic interdependencies, while at the same time preserving innovation. [...]
- JEL Code
- G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
E58 : Macroeconomics and Monetary Economics→Monetary Policy, Central Banking, and the Supply of Money and Credit→Central Banks and Their Policies
K23 : Law and Economics→Regulation and Business Law→Regulated Industries and Administrative Law
O33 : Economic Development, Technological Change, and Growth→Technological Change, Research and Development, Intellectual Property Rights→Technological Change: Choices and Consequences, Diffusion Processes
F36 : International Economics→International Finance→Financial Aspects of Economic Integration
G32 : Financial Economics→Corporate Finance and Governance→Financing Policy, Financial Risk and Risk Management, Capital and Ownership Structure, Value of Firms, Goodwill
- 9 July 2026
- WORKING PAPER SERIES - No. 3252Details
- Abstract
- We develop a general equilibrium theory of financial intermediation and its implications for liquidity regulation. The model is built around an agency problem arising from leveraged intermediation: banks finance loan origination with deposits and face moral hazard in risk management, while holding cash mitigates these incentives at the cost of foregone investment returns. Liquidity demand therefore emerges endogenously from incentive considerations rather than from exposure to exogenous funding shocks. In equilibrium, financial experts choose between allocating equity to the banking sector relative to the non-bank financial sector that can provide ex-post liquidity by buying bank assets. Asset prices are determined endogenously in liquidation states, linking banks’ ex ante liquidity choices to market liquidity and the allocation of intermediation across sectors. Comparing the decentralized equilibrium to a planner’s allocation, we show that liquidity regulation mandating higher cash holdings improves incentives within banks but is not sufficient to implement the efficient allocation. In particular, it leads to an inefficiently large banking sector that free-rides on liquidity provision by non-bank investors. Implementing the planner’s allocation requires a second policy instrument, such as limits on bank size or subsidies to equity-financed liquidity provision outside the banking sector.
- JEL Code
- G21 : Financial Economics→Financial Institutions and Services→Banks, Depository Institutions, Micro Finance Institutions, Mortgages
G28 : Financial Economics→Financial Institutions and Services→Government Policy and Regulation
D82 : Microeconomics→Information, Knowledge, and Uncertainty→Asymmetric and Private Information, Mechanism Design
D6 : Microeconomics→Welfare Economics
- 8 July 2026
- WORKING PAPER SERIES - No. 3251Details
- Abstract
- This paper studies how temporary migration affects macroeconomic fluctuations and the conduct of stabilisation policies using a two-country DSGE model with search-and-matching frictions and endogenous cross-border labour mobility. The analysis shows that migration responds endogenously to both labour market conditions and exchange rate movements, making it an important channel of cross-country adjustment. Labour mobility alters the transmission of shocks in three main ways. First, it redistributes adjustment to productivity shocks across regions, smoothing output fluctuations in receiving economies while producing more nuanced effects in sending economies. Second, it favorably affects policy trade-offs: migration reduces the output costs of monetary tightening, and it mitigates the crowdingout effects of fiscal expansions. Third, it strengthens cross-country spillovers by transmitting labour market shocks across regions and reshaping their domestic propagation. Overall, temporary migration emerges as a powerful but non-neutral adjustment mechanism that affects both the effectiveness of stabilization policies and the distribution of macroeconomic outcomes across integrated economies.
- JEL Code
- E20 : Macroeconomics and Monetary Economics→Consumption, Saving, Production, Investment, Labor Markets, and Informal Economy→General
E32 : Macroeconomics and Monetary Economics→Prices, Business Fluctuations, and Cycles→Business Fluctuations, Cycles
F16 : International Economics→Trade→Trade and Labor Market Interactions
F22 : International Economics→International Factor Movements and International Business→International Migration
F41 : International Economics→Macroeconomic Aspects of International Trade and Finance→Open Economy Macroeconomics
- 8 July 2026
- GOVERNING COUNCIL STATEMENT
- 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
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 | 1.1418 | |
| JPY | Japanese yen | 185.82 | |
| GBP | Pound sterling | 0.85205 | |
| CHF | Swiss franc | 0.9259 |
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?