Speech by Piero Cipollone, Member of the Executive Board of the ECB, at the conference on “Policy challenges in a fragmenting world: Global trade, exchange rates, and capital flow” organised by the Bank for International Settlements, the Bank of England, the ECB and the International Monetary Fund Frankfurt am Main, 29 April 2025 I’m honoured to welcome you to this conference, jointly organised by the Bank for International Settlements (BIS), the Bank of England, the European Central Bank (ECB) and the...

By Benjamin Hartung, Tobias Linzert, Imène Rahmouni-Rousseau, Yannik Schneider and Marta Skrzypińska One year after its announcement, the new operational framework is working as intended. Euro area banks have adapted to declining central bank reserves as the Eurosystem's balance sheet is normalising. The ECB Blog assesses how banks and money markets cope with the new environment. The normalisation of monetary policy over recent years has also meant declining amounts of central bank reserves in the hands of commercial banks. In March...

Amid heightened uncertainty, policymakers will need to deal with complex trade-offs between debt, slower growth, and new spending pressures Major policy shifts underway have heightened global uncertainty. The series of recent tariff announcements by the United States, and countermeasures by other countries have increased financial market volatility, weakened growth prospects, and increased risks. They come in the context of rising debt levels in many countries and already strained public finances, which in many cases will also need to accommodate new...

The global risk outlook has become more challenging amid increased trade and economic policy uncertainty. This letter was submitted to G20 Finance Ministers and Central Bank Governors (FMCBG) ahead of the G20’s meeting on 23-24 April. As his term as FSB Chair nears its conclusion on 1 July 2025, Klaas Knot reflects on the progress made in addressing global challenges to financial stability and outlines priorities for the future. The letter notes the challenging global risk outlook, with increased trade and...

Global growth is expected to decline and downside risks to intensify as major policy shifts unfold Executive Summary: Following an unprecedented series of shocks in the preceding years, global growth was stable yet underwhelming through 2024 and was projected to remain so in the January 2025 World Economic Outlook (WEO) Update. However, the landscape has changed as governments around the world reorder policy priorities. Since the release of the January 2025 WEO Update, a series of new tariff measures by the...

Amid trade tensions and high policy uncertainty, the path forward will be determined by how challenges are confronted and opportunities embraced Blog post by Pierre-Olivier Gourinchas | The global economic system under which most countries have operated for the last 80 years is being reset, ushering the world into a new era. Existing rules are challenged while new ones are yet to emerge. Since late January, a flurry of tariff announcements by the United States, which started with Canada, China,...

New targeted amendments to existing EU funding programmes will support faster, more flexible and coordinated investments in Europe's defence technological and industrial base (EDTIB). Under a new Regulation to stimulate defence-related investments within the EU budget proposed today by the Commission, the EU will strengthen its defence Readiness 2030 and to implement the ReArm Europe plan. The proposed changes will enhance the ability of the EU and Member States to develop, scale up and innovate in key defence capabilities, while streamlining access to EU...

Risks have risen as financial conditions tightened, with key vulnerabilities ahead Capital markets are essential for driving economic activity, providing mechanisms for raising funds and allocating resources efficiently. The stability of these markets and the financial institutions that intermediate them are therefore macro-critical, especially when market volatility and economic uncertainty are high, as they are now. In the latest Global Financial Stability Report, we assess that global financial stability risks have grown significantly, driven by tighter financial conditions and heightened trade and...