President Lagarde, will it be a Merry Christmas or a Merry Crisis?

President Lagarde, will it be a Merry Christmas or a Merry Crisis?

2022 has shown how important it is to live in homes that can protect us from the reckless actions of petrostates, and from skyrocketing fossil energy prices. For many families, it will be hard, if not impossible, to enjoy the Christmas period in healthy and comfortable homes. EU institutions, including the European Central Bank (ECB), can make sure that this will be the last Christmas of this kind. 

The gift that keeps on giving: Banks’ windfall profits as a consequence of ECB rate hikes

The gift that keeps on giving: Banks’ windfall profits as a consequence of ECB rate hikes

The ECB is expected to pay around €40 billion in net interest income to banks on the overnight deposits that they keep with the central bank. This estimated figure will jump to €53.7 billion if the ECB decides to increase the interest rate on its deposit facility (DF) from the current 1.5% to 2% on December 15. France and Germany expected to profit the most in absolute terms. We provide the implications of these purely accounting-induced profits for the wider banking system and the real economy.

The ECB doubles down on misguided interest rate hike

The ECB doubles down on misguided interest rate hike

The European Central Bank decided to raise interest rates, in an attempt to show its determination to fight inflation. However this decision is based on shaky justifications, which are likely to cause more harm than do any good for citizens’ purchasing power.

A review on the distributional effects of monetary policy

A review on the distributional effects of monetary policy

Inequality has long been a foremost public concern, but not so for central banks. While the orthodoxy according to which central banks engage in “neutral” policy-making is slowly crippling away, we’re still enormously far from taking the distributional consequences of money creation and allocation seriously. Intensifying the debate on the inequality effects of the central bank’s monetary policy is a small step in that direction. This blog suggests several starting points for that. 

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