European Central Bank

Sustainability labels vs. reality: how climate-friendly are green and ESG funds?

09/24/2025 European Central Bank Central banks

This paper assesses the environmental performance of sustainability-related investment funds compared to conventional ones across three dimensions: financed activities, portfolio carbon footprint, and investment in firms with ambitious science-based targets. We identify ESG funds using Morningstar (MS) strategies, the Sustainable Finance Disclosure Regulation’s Article 8/9 classification, and funds’ self-naming. We find that the greenest funds invest more in low-carbon sectors, but their carbon footprints are comparable to conventional funds.

The ECB-Multi Country Model. A semi-structural model for forecasting and policy analysis for the largest euro area countries

09/23/2025 European Central Bank Central banks

This paper introduces the European Central Bank’s Multi Country model (ECB-MC), a coherent macroeconomic framework designed to support economic forecasting and policy analysis within the Eurosystem. The ECB-MC captures the economic dynamics of the five major economies in the euro area – Germany, France, Italy, Spain, and the Netherlands – which account for more than 80 percent of the euro area total GDP.

The ECB-Multi Country Model. A semi-structural model for forecasting and policy analysis for the largest euro area countries

09/23/2025 European Central Bank Central banks

This paper introduces the European Central Bank’s Multi Country model (ECB-MC), a coherent macroeconomic framework designed to support economic forecasting and policy analysis within the Eurosystem. The ECB-MC captures the economic dynamics of the five major economies in the euro area – Germany, France, Italy, Spain, and the Netherlands – which account for more than 80 percent of the euro area total GDP.

Consumer expectations and actions during the recent trade tensions

09/22/2025 European Central Bank Central banks

Recent trade tensions and tariff announcements are significantly influencing the behaviour and expectations of European consumers. As revealed by the June 2025 Consumer Expectations Survey, consumers expect tariffs to drive up inflation, weaken household finances and dampen economic growth. In response, consumers are reducing overall spending or switching away from US products. While lower-income households are likely to cut back on spending, high-income households are more likely to substitute goods.

Are workers willing to accept pay cuts in exchange for remote working flexibility?

09/22/2025 European Central Bank Central banks

Since the pandemic, working from home has become more common. According to 2025 data, around 20% of employees in the euro area have a hybrid working pattern, i.e. they work from home between two and four days per week. Although a substantial share of workers (44%) work from home at least one day per week, most workers would not be willing to accept a pay cut in exchange for hybrid working possibilities. However, those employees who value being able to work from home would be willing to forgo up to 8.7% of their wages for this option.

The importance of the SSM’s fitness and propriety work for banks’ performance – evidence from 10 years of SSM work

09/18/2025 European Central Bank Central banks

In this paper, we empirically investigate how suitability concerns detected by the SSM in the fitness and propriety of management body appointees impact the performance of European banks in the period 2014-2023. We provide evidence that management body appointees where the assessment of the supervisory authorities raised concerns, had a negative impact on the bank’s future performance. The negative effect can be attributed to appointees where the supervisory assessment revealed such severe concerns that ancillary measures were imposed.

The importance of the SSM’s fitness and propriety work for banks’ performance – evidence from 10 years of SSM work

09/18/2025 European Central Bank Central banks

In this paper, we empirically investigate how suitability concerns detected by the SSM in the fitness and propriety of management body appointees impact the performance of European banks in the period 2014-2023. We provide evidence that management body appointees where the assessment of the supervisory authorities raised concerns, had a negative impact on the bank’s future performance. The negative effect can be attributed to appointees where the supervisory assessment revealed such severe concerns that ancillary measures were imposed.

Stylized facts in money markets: an empirical analysis of the eurozone data

09/17/2025 European Central Bank Central banks

Using the secured transactions recorded within the Money Markets Statistical Reporting database of the European Central Bank, we test several stylized facts regarding the interbank market of the 47-largest banks in the eurozone. We observe that the surge in the volume of traded evergreen repurchase agreements followed the introduction of the LCR regulation and we measure a rate of collateral re-use consistent with the literature.

The effects of monetary policy on banks and non-banks in times of stress

09/17/2025 European Central Bank Central banks

This paper investigates the effects of monetary policy on banks and non-bank financial institutions (NBFIs), with particular attention to the role of financial stress. We use high-frequency identified monetary policy shocks and state-dependent local projections to capture non-linear responses across financial sectors. Drawing on aggregated balance sheet data, including total assets, debt securities, and loans, we find that monetary tightening leads to broad-based contractions in total assets and debt holdings, with particularly pronounced effects for banks and investment funds.

Stylized facts in money markets: an empirical analysis of the eurozone data

09/17/2025 European Central Bank Central banks

Using the secured transactions recorded within the Money Markets Statistical Reporting database of the European Central Bank, we test several stylized facts regarding the interbank market of the 47-largest banks in the eurozone. We observe that the surge in the volume of traded evergreen repurchase agreements followed the introduction of the LCR regulation and we measure a rate of collateral re-use consistent with the literature.

Pages

Subscribe to European Central Bank