Tighter financial conditions test resilience of households, firms, governments and property markets Financial markets are vulnerable to disorderly adjustments, given investment fund vulnerabilities, stretched valuations, high volatility and low liquidity Euro area banks robust to recent stress outside the euro area, but higher funding costs and lower asset quality may weigh on profitability According to the May 2023 Financial Stability Review published today by the European Central Bank (ECB), the outlook for euro area financial stability remains fragile, in the context...

Interview with Fabio Panetta, Member of the Executive Board of the ECB, conducted by Karl de Meyer| 24 May 2023 | To safeguard financial stability, we need to keep central bank money at the heart of the financial system, Executive Board member Fabio Panetta tells Les Échos as the ECB turns 25. And a digital euro would be a risk-free means of payment that Europeans can use anywhere in the euro area. As the ECB celebrates its 25th anniversary today, where...

The euro is more than a currency, says President Christine Lagarde. It is the strongest form of European integration and stands for a united Europe that works together, protecting and benefiting all its citizens. The ECB, with its commitment to price stability, will always be a cornerstone of that effort. On 1 June 1998, the European Central Bank was established to prepare for the launch of the euro – the world’s largest ever currency changeover. As a lawyer at the...

Closer ties allowed Europe to find new natural gas sources after Russia’s supply cutoff, and growing global export capacity can reduce market fragmentation. Natural gas might be the same commodity everywhere in the world, but prices can vary dramatically because of the complex network of infrastructure needed to transport it. The result is a partially fragmented global market, mainly because most natural gas moves by pipeline—unlike the market for crude oil, which is more integrated and tends to trade at...

How to handle China is a major political issue for the EU, one that is more complex than dealing with Russia. Certainly, the EU’s political and economic systems have profound differences with both Russia and China. Unlike Russia, China is a real systemic actor, approaching 20% of the world economy and growing while Russia represents around two percent and decreasing. The economic, political, and financial influence of China is considerable, and its military power continues to grow. Its ambition is...

The United States and European Union are committed to working more closely on sanctions as a key tool to address shared foreign policy goals. From April 26–28, the U.S. Department of Treasury’s Office of Foreign Assets Control (OFAC), the European External Action Service (EEAS), and the European Commission Directorate-General for Financial Stability, Financial Services and Capital Markets Union (DG FISMA) concluded a multi-day technical meeting in Brussels, exchanging best practices and strengthening working relationships. The purpose of the meeting was...

On 17 May 2023, the Commission put forward proposals for the most ambitious and comprehensive reform of the EU Customs Union since its establishment in 1968. Key features of the proposals The reform responds to the current pressures under which EU Customs operates, including a huge increase in trade volumes, especially in e-commerce, a fast-growing number of EU standards that must be checked at the border, and shifting geopolitical realities and crises. The measures proposed present a world-leading, data-driven vision for EU...