Speech by Vice Chair Richard H. Clarida at "SOMC: The Federal Reserve’s New Policy Framework" a forum sponsored by the Manhattan Institute's Shadow Open Market Committee, New York, New York (via webcast) | On August 27, the Federal Open Market Committee (FOMC) unanimously approved a revised Statement on Longer-Run Goals and Monetary Policy Strategy, and, at its September and December FOMC meetings, the Committee made material changes to its forward guidance to bring it into line with this new policy...

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Many countries are experiencing a combination of high public debt and low interest rates. This was already the case in advanced economies even prior to the pandemic but has become even starker in its aftermath. A growing number of emerging market and developing economies are likewise enjoying a period of negative real rates—the interest rate minus inflation—on government debt. The IMF has called on countries to spend as much as they can to protect the vulnerable and limit long-lasting damage to economies, stressing the...

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Current account recorded €26 billion surplus in February 2021, down from €35 billion in previous month Current account surplus amounted to €259 billion (2.3% of euro area GDP) in 12 months to February 2021, down from €263 billion (2.2%) one year earlier In financial account, euro area residents’ net acquisitions of foreign portfolio investment securities totalled €804 billion and non-residents’ net sales of euro area portfolio investment securities totalled €21 billion in 12 months to February 2021 Chart 1 Euro area current account...

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The Executive Board of the Conference on the Future of Europe, comprising representatives from the European Parliament, the Council of the European Union and the European Commission, is launching the multilingual digital platform for the Conference on the Future of Europe inviting all EU citizens to contribute to shaping their own future and that of Europe as a whole. The platform is available in 24 languages, allowing citizens from across the Union to share and exchange their ideas and...

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The European Committee of the Regions and the European Commission's Joint Research Centre organized a joint online workshop on 15 April to underline the role of regional Smart Specialisation Strategies as a cornerstone of EU policies, from the post-pandemic recovery plans to the delivery of the European Green Deal, digital transition and the Sustainable Development Goals. Smart Specialisation is an essential part of EU's cohesion policy: a place-based approach characterised by the identification of the strengths and assets of each...

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Regular format International meetings The President of the Eurogroup, Paschal Donohoe, informed the Eurogroup about the discussions at the spring meetings of the World Bank Group and the International Monetary Fund, in which he represented the euro area. Thematic discussion on insolvency frameworks The Eurogroup held a thematic discussion on insolvency frameworks based on a technical note prepared by the Commission. Effective and efficient insolvency frameworks are very important for achieving a quicker recovery as well as more robust growth and deeper financial integration...

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The economic costs of the pandemic have fallen most heavily on those least able to bear them. Governments have taken steps to support people and firms through wage subsidies, unemployment benefits, and other fiscal measures. But more investment in health care, education, and other basic public services will still be needed, and this will come at a cost. With rising inequality and mounting public debt, countries will have to find innovative approaches to raise the money to pay for it all. 'Public sentiment...

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This article argues that European Central Bank (ECB) and Federal Reserve System (Fed) monetary policy spill over to other countries asymmetrically. At the bilateral level, the Fed’s impact on the euro area is material to firms’ financial conditions and economic activity. Conversely, the impact of the ECB’s actions on the US economy is minimal. On a global scale, both central banks’ monetary policies matter for other countries, but the Fed’s monetary policy has a more sizeable impact, particularly on...

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Citizens and professionals alike value privacy most for possible future digital euro Preference for a digital euro being integrated into existing banking and payment systems Public consultation provides valuable input for Eurosystem’s decision in mid-2021 on starting formal investigation on digital euro The European Central Bank (ECB) has published today a comprehensive analysis of its public consultation on a digital euro. The analysis confirms, by and large, our initial findings: what the public and professionals want the most from...

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The Commission has today taken steps to ensure that borrowing under the temporary recovery instrument NextGenerationEU will be financed on the most advantageous terms for EU Member States and their citizens. The Commission will use a diversified funding strategy to raise up to around €800 billion in current prices until 2026. This approach, which will be in line with the best practices of sovereign issuers, will enable the Commission to raise the needed volumes in a smooth and efficient...

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