European Central Bank

The effects of a large energy price shock on bank credit

07/27/2026 European Central Bank Central banks

This study investigates the effect of the large shock to energy prices following the Russian invasion of Ukraine on bank credit to firms. To isolate the causal effect of the shock, it compares bank lending to high-energy-intensive firms to that of similar low-energy-intensive firms. Following the shock, bank credit to high-energy-intensive firms persistently declined, while their interest rates on new loans rose and other loan terms tightened.

The effects of a large energy price shock on bank credit

07/27/2026 European Central Bank Central banks

This study investigates the effect of the large shock to energy prices following the Russian invasion of Ukraine on bank credit to firms. To isolate the causal effect of the shock, it compares bank lending to high-energy-intensive firms to that of similar low-energy-intensive firms. Following the shock, bank credit to high-energy-intensive firms persistently declined, while their interest rates on new loans rose and other loan terms tightened.

Central banks, debt managers, and specialness in the Bund repo market

07/27/2026 European Central Bank Central banks

Elevated repo rate specialness for German government bonds in 2016–17, and particularly in 2022-23, has often been linked to the absorption of these securities by the ECB’s asset purchase programmes. We provide the first evidence on how the debt management office mitigates these effects by jointly analyzing daily secondary-market trades and repo operations of the Deutsche Finanzagentur (DFA) alongside Eurosystem transactions in Bunds from 2015–2024.

Import tariff transmission in a production network

07/24/2026 European Central Bank Central banks

We find that whether US import tariffs have supply-side effects or demand-side effects on US manufacturing sectors depends on where the affected sectors are located in the US production network. Using local projections in a panel of US manufacturing sectors, we find that US import tariffs —including the 2018-19 tariff hikes— led to sectoral output contractions via two different channels: (1) Tariff increases act as negative supply shifters for sectors that use goods from tariff-facing sectors as input in production and thus face rising input costs.

Import tariff transmission in a production network

07/24/2026 European Central Bank Central banks

We find that whether US import tariffs have supply-side effects or demand-side effects on US manufacturing sectors depends on where the affected sectors are located in the US production network. Using local projections in a panel of US manufacturing sectors, we find that US import tariffs —including the 2018-19 tariff hikes— led to sectoral output contractions via two different channels: (1) Tariff increases act as negative supply shifters for sectors that use goods from tariff-facing sectors as input in production and thus face rising input costs.

The devil in the DeTail: assessing state-contingent tail effects of a releasable macroprudential capital buffer using a parsimonious agent-based framework

07/24/2026 European Central Bank Central banks

This paper develops an agent-based framework (DeTail) to assess the state-contingent tail effects of releasable macroprudential capital buffers. The model features heterogeneous firms, households, and banks, and a single central bank, all interacting in a fully integrated, stock-flow consistent framework which generates endogenous credit cycles. Using this approach, we evaluate how time-varying capital requirements affect the time-varying distributions of credit growth, firm and household default rates, and bank losses along the credit cycle.

The devil in the DeTail: assessing state-contingent tail effects of a releasable macroprudential capital buffer using a parsimonious agent-based framework

07/24/2026 European Central Bank Central banks

This paper develops an agent-based framework (DeTail) to assess the state-contingent tail effects of releasable macroprudential capital buffers. The model features heterogeneous firms, households, and banks, and a single central bank, all interacting in a fully integrated, stock-flow consistent framework which generates endogenous credit cycles. Using this approach, we evaluate how time-varying capital requirements affect the time-varying distributions of credit growth, firm and household default rates, and bank losses along the credit cycle.

Main findings from the ECB’s recent contacts with non-financial companies

07/24/2026 European Central Bank Central banks

This box summarises the main findings from recent contacts between ECB staff and representatives of 76 leading non-financial companies operating in the euro area. According to these exchanges, which mainly took place between 22 June and 1 July 2026, activity continued to grow moderately in the second quarter with similar momentum expected for the third quarter. While the war in the Middle East was weighing on consumer spending somewhat, the overall impact on activity seemed limited as some firms benefited from less competition and precautionary stockbuilding.

The changing geography of banking in CESEE. Branch closures outpace openings

07/15/2026 European Central Bank Central banks

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.

Bank deposit pricing in the euro area

07/15/2026 European Central Bank Central banks

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.

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