ECB

Omicron may give inflation a chance to bed in

29 Nov 2021

The new coronavirus variant could ease short-term price pressures if it triggers wider lockdowns that curb consumption. But if it prolongs supply-chain problems the reverse will be true in the longer term. Especially if cautious central bankers delay tightening monetary policy.

Central Europe is monetary policy’s control test

8 Nov 2021

The Czech, Polish and Hungarian central banks are hiking interest rates, the traditional riposte to rising inflation. In contrast, peers in major economies are responding less aggressively to price pressures. That makes for an interesting experiment.

UK wades into central banks vs. markets fray

4 Nov 2021

Bank of England boss Andrew Bailey has a different mandate from Fed Chair Jay Powell. But his basic challenge is the same: persuading investors that interest rates won’t rise as much as they think next year. The Briton’s old-school inflation target makes his job harder.

ECB needs a louder megaphone to reach bond markets

28 Oct 2021

President Christine Lagarde said she won’t hike rates as soon as investors anticipate. But that didn’t change their expectations and euro zone debt yields rose. She will have to do a better job of convincing them if she is to avert an unwanted tightening in financing conditions.

Jens Weidmann’s best replacement is another hawk

20 Oct 2021

The Bundesbank president has unexpectedly resigned. Weidmann criticised Mario Draghi’s bond-buying plan, and a more dovish rate-setter could help the ECB keep policy loose in tricky times. But having an articulate and critical representative also helped keep German voters happy.

ECB has the least worrying inflation problem

1 Oct 2021

Euro zone consumer prices rose 3.4% in September, strengthening the hand of those who want boss Christine Lagarde to wind up emergency monetary stimulus. But structural unemployment is higher, the economy less robust and fiscal policy less stimulative than in the United States.

Easing crisis leaves Lagarde with tough transition

30 Sep 2021

The European Central Bank boss will have to fall back on a pre-pandemic bond-buying scheme once its emergency purchase programme runs out. The former is less flexible and may force Christine Lagarde to choose between flouting rules or curtailing support to the fragile economy.

Stagflation jitters are at least half wrong

29 Sep 2021

High inflation and stagnant activity would be a noxious mix for markets. Central bankers have the tools, and likely the will, to combat the former. But when price pressures are a symptom of supply shocks, as now, monetary policy is a crude weapon that will lead to weaker growth.

Capital Calls: Lagarde channels Thatcher

9 Sep 2021

Concise views on global finance: The ECB boss will buy fewer bonds but tells markets: “The lady isn’t tapering.” A tough decision on whether to scale back bond purchases more decisively will come later.

ECB’s old problem will defy new strategy

22 Jul 2021

Boss Christine Lagarde revealed the practical consequences of tweaking her inflation target: interest rates may stay at record lows for even longer. But given ultra-easy policy has failed for years to make prices rise faster, the chances of hitting her new goal are no better.

Lagarde’s green turn may not need to be that sharp

16 Jul 2021

The ECB boss’s 293 bln euro corporate bond programme may soon tilt toward environmental saints and away from sinners. Too heavy a hand could distort markets and inflate green bubbles. But it’s a big enough change for it not to matter if, as seems likely, the intervention is mild.

ECB has reason to leapfrog Fed on digital currency

14 Jul 2021

President Christine Lagarde took the first step towards an electronic euro. China and some others are moving faster. But the innovation may be more useful in the euro zone than in the United States, especially if the ECB can impose negative interest rates directly on households.

Capital Calls: SXSW

19 Apr 2021

Concise views on global finance: Rolling Stone publisher Penske Media is taking a 50% stake in hipster arts festival South By Southwest.

The Exchange: ECB President Christine Lagarde

14 Apr 2021

What role does the central bank play in combatting climate change? How will it confront the emergence of digital currencies? What if the U.S. economy charges ahead while Europe languishes? Lagarde takes on these questions and more in an exclusive discussion with Breakingviews.

Capital Calls: BlackRock’s Archegos angle, SPACs

30 Mar 2021

Concise views on global finance in the Covid-19 era: The fallout from the collapse of Bill Hwang’s family office gives regulators reasons to focus on funds, not fund managers; and bosses of blank-check companies don’t take investor questions.

Capital Calls: Netflix, ECB, Glass Lewis, Zalando

16 Mar 2021

Concise views on global finance in the Covid-19 era: The streaming service’s password-sharing crackdown twists the knife; the central bank worries about identifying bad loans; the proxy adviser’s sale underscores its place on Wall Street; the online fashion giant’s bold targets.

Lagarde’s yen for consensus will be stress-tested

11 Mar 2021

The ECB will step up the pace of bond-buying to combat a rise in yields. Moving sooner wouldn’t have allowed President Christine Lagarde to get the governing council’s green light. Fast-moving markets may require speedier reactions than her instinct for forging unity permits.

Central banks will have to fight reflation tantrum

26 Feb 2021

Improving economic prospects have boosted bond yields. Fed boss Jerome Powell and his global peers will welcome the cause but not the effect. If their rhetoric can’t halt the sharp rise in borrowing costs, they will be forced to ramp up asset purchases to safeguard the recovery.

Precision is ECB’s enemy when picking compass

18 Feb 2021

President Christine Lagarde has stressed the need for favourable borrowing conditions to justify her 1.85 trillion euro crisis response. Rate-setters will in March discuss how to measure this concept. Being too specific may backfire and limit the central bank’s wiggle room.

Corona Capital: Indian banks, LBOs, Stellantis

18 Jan 2021

Concise views on the pandemic’s corporate and financial fallout: Indian banking guru Aditya Puri gives reasons to be bullish about New Delhi’s lenders at a Breakingviews predictions event; the ECB cracks down on risky loans; carmaker Stellantis gets a boost from passive funds.