Home Banking Uncomfortable realities behind ECB’s dilemma over fragmentation and inflation, ECB to design new anti-fragmentation instrument, and more

Uncomfortable realities behind ECB’s dilemma over fragmentation and inflation, ECB to design new anti-fragmentation instrument, and more

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Uncomfortable realities behind ECB’s dilemma over fragmentation and inflation

By David Marsh

The European Central Bank’s complex planning for an anti-fragmentation facility for euro area unity could backfire – by exposing rather than alleviating long-standing sources of fracture. The ECB’s uneven communications over efforts to limit renewed bond market flare-ups and harmonise its ‘monetary transmission’ demonstrate an uncomfortable dilemma.

 
 ECB to design new anti-fragmentation instrument
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By Lewis McLellan
What is the appropriate spread between German and Italian government debt? The obvious answer is ‘what the market determines’, but the ECB is unhappy with that result. It will be an elegant tool that allows the ECB to contain spreads widening and still address inflation. 
 
 MEETINGS 
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Economic developments in Spain and the euro area
Tuesday 28 June, Roundtable
Ángel Gavilán, director general economics, statistics and research at Banco de España, joins OMFIF to discuss the bank’s latest annual report. The report reviews rising global inflation during the pandemic recovery, developments in the euro area and more. 
 
 ON DEMAND 
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Next Generation EU with Siegfried Ruhl: one year later
The Next Generation EU fund – set up to help finance Europe’s recovery from the economic damage of the Covid-19 pandemic – has been operating since last June. Siegfried Ruhl, head of funding and investor relations at the European Stability Mechanism, speaks to OMFIF’s John Orchard about it. 
 
 Data: Towards a new age of economic enlightenment
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As regulators and policy-makers work to balance protection and innovation in their evolving frameworks, this landmark report explores the use of data and its potentially transformative impact on developments in the global economy, financial services, the business community and society as a whole.

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