Speech by Christine Lagarde, President of the ECB, at the Hearing of the Committee on Economic and Monetary Affairs of the European Parliament It is a pleasure to be with you again for our regular dialogue. In recent months we have faced a period of heightened uncertainty. Yet, despite these challenges, the euro area economy has held up well. This resilience is no coincidence. It reflects, in no small part, the strength of two achievements we sometimes take for granted: our Single...

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By: Andrea Deghi, Mahvash S. Qureshi, Tomohiro Tsuruga Policymakers should enhance market surveillance through systemic risk monitoring including stress testing and scenario analysis Foreign exchange is the largest and most liquid financial market, with nearly $10 trillion changing hands daily. It’s the underpinning for global trade and finance—and its structure is changing as nonbank financial institutions, or NBFIs, assume a larger role in transactions used to manage currency risk and access to foreign funding. The market’s central role in the international monetary and financial system makes it...

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By Marijn Bolhuis, Arindam Roy, Patrick Schneider, Zhao Zhang Stronger fiscal and monetary policy frameworks and more developed local currency debt markets have supported emerging market resilience Emerging market economies have held up remarkably well in recent years, even after periods of global financial turbulence. While favorable external conditions (in other words, good luck) often helped, it’s clear that good policies matter. In the past, “risk-off” episodes—when global investors indiscriminately sold riskier assets—often hit emerging markets especially hard. They triggered sharp capital outflows and tighter...

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