Latest articles and blogs
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Interest rate steering as liquidity declines
The implementation of Eurosystem monetary policy is undergoing a transition as the volume of central bank reserves – or liquidity – declines. In the future, monetary policy implementation and interest rate steering will rely on both a well-functioning money market and banks’ demand for Eurosystem refinancing operations.
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Variable rate corporate loans strengthen transmission of monetary policy
There are considerable differences between countries of the euro area in the prevalence of variable rate bank loans. According to recent research by the authors, the extent to which bank loans are variable rate loans influences how the key ECB interest rates affect the demand for corporate loans.
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Impact of ECB’s policy rate changes on corporate loan rates varies strongly across countries
A considerable proportion of the corporate loan stock in the euro area consists of loans with a fixed – rather than a variable – rate of interest. However, this proportion differs by industry and even more so by country. In Germany and France, the majority of corporate loans are tied to a fixed rate. In Finland, the proportion of fixed rate loans is small.
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Analysis: What is the effect of unconventional monetary policy on asset prices?
Major central banks have cut interest rates close to zero and introduced non-standard policy measures. What are the theoretical foundations of these policies and what do we know about their effects on financial asset prices?