FROM THE BLOG

Wages and inflation: the ECB’s non-dilemma

Wages and inflation: the ECB’s non-dilemma

The European Central Bank (ECB) points to wage developments as a cause of concern, arguing that it jeopardises their capacity to reach their inflation target of 2%. This is an unfounded fear, as current wage trends are a natural development against the backdrop of the recent energy shock. Being guided by this concern, the ECB is erring on the side of too tight for too long.

Implications of the ECB’s new operational framework for the green transition

Implications of the ECB’s new operational framework for the green transition

On Wednesday March 13, 2024, the European Central Bank (ECB) announced changes to its operational framework, the toolbox it uses to implement its monetary policy. Think of it like the control panel of a car, with the ECB adjusting the settings (interest rates) to keep the car (financial conditions and prices) running smoothly. The operational framework relates to how the ECB adjusts these settings, which is to say the mechanisms by which it sets interest rates.

Dual rates: here is how the ECB can speed up the green transition

Dual rates: here is how the ECB can speed up the green transition

When we think of fighting climate change, financial institutions like the European Central Bank (ECB) might not immediately come to mind. However, as we have shown in our latest explainer, the ECB holds a pivotal role in this global challenge. As a major financial authority, the ECB can influence financial flows and investments across Europe, making it a potential powerhouse in driving the green transition.

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