The COVID-19 pandemic has accelerated the trend toward digitalisation of retail financial services. This report examines whether the COVID-19 pandemic changed the ways in which individuals and firms engage with innovative financial service providers and traditional financial incumbents. Its main finding is that the pandemic has accelerated the trend toward digitalisation of retail financial services. Comprehensive data on market shares of FinTechs, BigTechs and incumbent financial institutions in retail digital services are scarce. However, available proxies and insights from market participants...

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Introductory statement by Fabio Panetta, Member of the Executive Board of the ECB, at the Committee on Economic and Monetary Affairs of the European Parliament | Thank you for inviting me to update you on the digital euro project and the progress made since we last met in November. We have previously discussed the broad policy objectives associated with a digital euro. Today, I would first like to highlight some important features which, by making a digital euro attractive to citizens...

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Labor shortages have pushed up wage growth, benefitting low-wage workers but adding to inflation risks. Bringing more workers back into the labor force would ease these pressures while making the recovery more inclusive. By late 2021, there were 50 percent to 80 percent more unfilled jobs in Australia, Canada, the United Kingdom and the United States than there were prior to the pandemic. Open vacancies were at or above their 2019 levels in other advanced economies too, and have risen...

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The Commission is presenting today a package of European Green Deal proposals to make sustainable products the norm in the EU, boost circular business models and empower consumers for the green transition. As announced in the Circular Economy Action Plan, the Commission is proposing new rules to make almost all physical goods on the EU market more friendly to the environment, circular, and energy efficient throughout their whole lifecycle from the design phase through to daily use, repurposing and...

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The European Commission and the United States announce that they have agreed in principle on a new Trans-Atlantic Data Privacy Framework, which will foster trans-Atlantic data flows and address the concerns raised by the Court of Justice of the European Union in the Schrems II decision of July 2020. The new Framework marks an unprecedented commitment on the U.S. side to implement reforms that will strengthen the privacy and civil liberties protections applicable to U.S. signals intelligence activities.  Under the...

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Today, the European Council was joined by President Joseph R. Biden, Jr. of the United States. The leaders discussed the coordinated and united response of the European Union and the United States to Russia's unprovoked and unjustified military aggression in Ukraine. They reviewed their ongoing efforts to impose economic costs on Russia and Belarus, as well as their readiness to adopt additional measures and to stop any attempts to circumvent sanctions. Leaders discussed the urgent needs caused by Russia’s aggression, committed to...

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Following up rapidly on the REPowerEU Communication and the Versailles Declaration, the Commission has set out ideas today for collective European action to address the root causes of the problem in the gas market and ensure security of supply at reasonable prices for next winter and beyond. Leaders will continue the discussion on these options at this week's European Council. Commissioner for Energy, Kadri Simson, said: “Global and European energy markets are going through turbulent times, particularly since the Russian...

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Conventional wisdom on capital flows holds that foreign direct investment is for the long-term, while securities and other flows may be more volatile. However, as Olivier Blanchard and Julien Acalin showed, a large proportion of measured foreign direct investment can be flows going in and out of a country on their way to a final destination. What explains this? The answer is special purpose entities (SPEs). SPEs are legal entities set up to obtain specific advantages from a host economy, in...

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The Council and the Parliament today reached a provisional political agreement on the Digital Markets Act (DMA), which aims to make the digital sector fairer and more competitive. Final technical work will make it possible to finalise the text in the coming days. The DMA defines clear rules for large online platforms. It aims to ensure that no large online platform that acts as a ‘gatekeeper’ for a large number of users abuses its position to the detriment of companies...

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The implementation of the BEPS package to tackle international tax avoidance continues to progress, as the OECD releases the latest peer review report assessing the actions taken by jurisdictions to prevent tax treaty shopping and other forms of treaty abuse under Action 6 of the OECD/G20 BEPS Project. This peer review process, which includes data on tax treaties concluded by each of the 139 jurisdictions that were members of the OECD/G20 Inclusive Framework on BEPS on 31 May 2021, was...

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