Eurozone
European presidents publish road map to closer union
Mario Draghi among senior officials to contribute to report calling for greater economic convergence, financial integration and ultimately more shared decision-making on fiscal policy
ECB paper tests systemic risk using ‘VAR for VaR’ model
Researchers use quantile regression in attempt to better account for outliers, which they say could have applications for stress testing
German inequality would fall with US-style home ownership, Bundesbank study shows
Discussion paper fits US home ownership structure to German economy, finding large changes in the distribution and median level of wealth
Eurozone recovery set to broaden, says ECB bulletin
Report presents growing body of good news for most eurozone economies as wages and consumption rise, inflation bottoms out and investment begins to return
Bank of Greece foresees ‘uncontrollable crisis’ if talks fail
Central bank weighs in with bleak prognosis for life without the euro as talks go to the wire; next Eurogroup meeting on June 18 offers last chance
ECB’s Mersch dismisses concerns over T2S launch at weekend
ECB executive board member admits a few bugs remain in Target2 Securities system, but argues they are not major and will not interrupt this weekend’s migration
Ireland to phase out one- and two-cent coins
Central bank will lead project that will see cash payments rounded to discourage use of low-value coins; decision follows successful trial in 2013
Overconfident forecasters may be ‘overrepresented’ in ECB survey
Working paper finds participation in the Survey of Professional Forecasters drops when uncertainty rises, suggesting the results may be biased
EU court rules OMTs are legal
ECB is vindicated as ECJ rules in favour of crisis measure that would see the central bank buy potentially unlimited amounts of sovereign debt to protect ‘singleness’ of monetary policy
Draghi defends ‘distributional consequences’ of QE
ECB president suggests easy monetary policy will benefit all citizens in the longer run; economists describe impact on inequality as “ambiguous” in research prepared for Econ Committee
Nowotny considers ‘human costs’ of structural reform
National Bank of Austria governor challenges economists to think about the quality of economic growth, suggesting this could have implications for the pursuit of structural reforms
EBA recommends balance between filling resolution fund and procyclicality
European Commission could allow some variation in banks’ contributions to Single Resolution Fund to avoid procyclicality, but reaching the fund’s target level is ‘first priority’
ECB paper examines financial exposure in eurozone
Working paper finds eurozone investors are ‘overexposed’ to securities issued within the region, more so in the case of ‘low-rating economies’
Klaas Knot blames disharmony in regulation for higher risks
A lack of common standards in eurozone capital markets was an ‘aggravating factor’ in the run-up to the financial crisis, Dutch governor says; urges commission to add this to CMU proposals
Economists expect last-minute Greek deal
With Greek finances still looking close to collapse, Central Banking asks a group of economists what the consequences of a last-minute agreement or default might be
New euro banknotes go down well in the Netherlands
Study conducted for the Netherlands Bank finds new €5 and €10 banknotes are more popular than their predecessors, though familiarity with design features remains low
IMF researchers highlight high cost of unnecessary fiscal consolidation
For countries with very low borrowing costs, allowing debt ratios to fall ‘organically’ via growth is likely to be less damaging to the economy than harsh austerity, authors say
Greek governor wants surplus countries to recognise ‘toxic’ effect of austerity
Yannis Stournaras warns surplus countries must bear a share of the burden of adjustment in Europe or risk the rise of extreme political parties; says he is optimistic a deal is ‘not far away’
ECB article calls for ‘consistent’ macro-prudential policies
Article in latest financial stability review says policies should be applied consistently across the eurozone to avoid spillovers
Collateral impact from eurozone QE still unclear, says Euroclear’s Evenepoel
Effect of new liquidity regulations and eurozone quantitative easing on collateral is still uncertain, but the market is ‘always creative’, according to Euroclear’s head of treasury
National Bank of Slovakia hails significant new responsibilities in 2014
Annual report highlights broad changes to its key activities, as the central bank took on new staff to cope with expanded supervisory role
Mario Draghi urges reform to ‘unleash’ eurozone potential
ECB president highlights importance of the credibility and type of structural reforms, as well as their interaction with other policies; Stanley Fischer points to ‘missing fiscal framework’
ECB looks for ‘quick wins’ to put momentum behind CMU
Eurosystem report on capital markets union emphasises need for the project to deliver early victories if it is to gather enough momentum to be a success
Eurozone moving towards ‘single market for collateral’, say central bankers
Panellists from Belgian, French and Dutch central banks discuss moves towards harmonised collateral markets in Europe at conference in Brussels