The ECB’s climateflation headache

The ECB’s climateflation headache

Extreme weather events are growing in size, power and frequency, meaning our economies are increasingly disrupted. We show how this results in climateflation, which poses a dilemma to the ECB’s policymaking. In a world plagued by supply shocks induced by climate change, conventional monetary policy faces complicated trade-offs in terms of economic activity and prices, while at the same time proving incapable of tackling the source of inflation.

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.

SIGN UP TO OUR EMAILS

As a supporter, you’re at the heart of everything we do. We’d love to keep you updated about our exciting work and the ways you can help, including campaigns and events that you might be interested in. We promise never to sell or swap your details and you can change your preferences at any time. To do so, simply call +32 2 880 04 34 or email info@positivemoney.eu

You have Successfully Subscribed!