European Central Bank

The Eurosystem policy response to developments in retail payments

Retrieved on: 
Wednesday, February 7, 2024

Retail payments are undergoing profound changes that are reshaping the European payments landscape.

Key Points: 
  • Retail payments are undergoing profound changes that are reshaping the European payments landscape.
  • The retail payments ecosystem and consumers’ attitudes and preferences are evolving and influencing one another.

What drives banks’ credit standards? An analysis based on a large bank-firm panel

Retrieved on: 
Wednesday, February 7, 2024

An analysis based on a large

Key Points: 
    • An analysis based on a large
      bank-firm panel

      No 2902

      Disclaimer: This paper should not be reported as representing the views of the European Central Bank
      (ECB).

    • We find
      that weaker capitalised banks adjust their credit standards more than healthier banks, especially for
      firms with a higher default risk.
    • Here we find t hat w eaker b anks r espond m ore f orcefully by
      tightening their credit standards more than better capitalised banks.
    • On the contrary, weaker banks
      may be more prone to adopt looser credit standards, with the aim of increasing their revenues.
    • To answer these questions, we analyse the determinants of banks? credit standards, i.e., their internal
      guidelines or loan approval criteria applied when deciding on granting credit.
    • 2 Altavilla

      ECB Working Paper Series No 2902

      2

      area banks tighten their credit standards more when linked to riskier firms, measured via firms? leverage
      and default risk.

    • We assess how euro area banks adjusted their credit standards in response to
      the negative COVID-19 pandemic shock, after accounting for government support measures.
    • When deciding on their credit standards, banks assess risks
      based on both their own loss absorption capacity and the credit risk of their borrowers.
    • On the contrary,
      weaker banks may be more prone to adopt looser credit standards, with the aim of increasing their
      revenues.
    • We provide evidence that
      euro area banks tighten their credit standards more when linked to riskier firms, measured via firms?
      leverage and default risk based on the Altman Z-score.
    • In
      addition, they focus on a different research question and use data from the IBLS only as a control.
    • ECB Working Paper Series No 2902

      5

      capital position implies less tightening of lending criteria, possibly reflecting the fact that banks can
      afford to adjust their credit standards more moderately.

    • Based on our results, this implies a stronger deterioration of their lending conditions compared
      with less vulnerable firms.
    • We assess how euro area banks adjusted their credit standards in response to
      the negative COVID-19 pandemic shock, after accounting for government support measures.
    • This is in line with the role of government support
      measures such as loan guarantees mitigating banks? exposure to firms? credit risks as they shield banks
      from firms? increased credit risks.
    • 2

      Related literature

      Our paper is closely related to studies analysing credit supply based on BLS indicators and the impact
      of monetary policy shocks on bank lending conditions in the euro area.

    • Hempell and Kok (2010) disentangle
      pure loan supply based on the BLS factors and investigate the role played by such factors for loan growth.
    • Several other studies link confidential individual BLS data with actual bank-level data, but not firm
      data, allowing an analysis of bank characteristics relevant for bank lending conditions.
    • They find that a short-term interest rate shock decreases both loan supply
      and demand, but more for less healthy banks.
    • Their findings are consistent with the results of our paper on the favourable impact of bank health on lending standards.
    • Both papers tend to find no evidence of higher risk taking of banks as a result
      of accommodative monetary policy.
    • More recent studies are based on
      confidential bank and firm-level data from national credit registers.
    • (2012) who focus on the bank-firm-relationship in Spain, based on credit register data.
    • Ferrero, Nobili, and Sene (2019) arrive at a corresponding conclusion on the risk-taking
      channel based on a confidential loan-level dataset of Italian banks.
    • In another paper, Altavilla, Boucinha, and Bouscasse (2022)
      disentangle credit demand and supply based on euro area credit register data (AnaCredit) for the period
      of the pandemic.
    • Our results emphasise the
      mitigating impact of government guarantees on a tightening of credit standards during the pandemic.
    • This mitigating impact played a major role in loan demand and not credit supply being decisive for lending volumes during the pandemic.
    • Based on their model, accommodative monetary policy is part of the optimal policy mix, combined with social insurance.
    • To keep the wealth of information
      available in the BLS, we run our analysis at the quarterly frequency of the survey.
    • of employees

      101.4

      2456.9

      2.0

      4.0

      12.0

      37.0

      116.0

      14944589

      Panel (a): Banks
      Credit standards

      Loan loss provisions
      Panel (b): Firms

      Notes: Descriptive statistics for the bank-firm sample included in the regression analysis.

    • Specifically, a one
      standard deviation increase in the CET1 ratio leads to 0.2 standard deviations lower credit standards,
      i.e., easier credit standards.
    • In their lending decisions, banks assess risks based on both their own
      loss absorption capacity and the credit risk of their borrowers.
    • ?Credit supply and monetary policy: Identifying the bank balance-sheet channel with loan applications.? American Economic
      Review 102 (5):2301?2326.
    • ?Hazardous times for monetary policy: What do twenty-three million bank loans say
      about the effects of monetary policy on credit risk-taking?? Econometrica 82 (2):463?505.
    • ?The credit cycle and the business cycle: new findings using
      the loan officer opinion survey.? Journal of Money, Credit and Banking 38 (6):1575?1597.
    • guarantees: proxy from BLS, bank level

      0

      .1

      .2

      .3

      .4

      Government guarantees exposure

      -.5

      -.25

      0

      .25

      .5

      Government guarantees exposure

      Notes: Based on results from columns (3) and (6) of Table 4.

Turkey Construction Industry Report 2023: Output Grew by 5.1% in 2023 Due to Re-Building of Infrastructure After an Earthquake in February - Forecasts to 2027 - ResearchAndMarkets.com

Retrieved on: 
Tuesday, January 30, 2024

The "Turkey Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market France, 2023-2027" report has been added to ResearchAndMarkets.com's offering.

Key Points: 
  • The "Turkey Construction Market Size, Trends, and Forecasts by Sector - Commercial, Industrial, Infrastructure, Energy and Utilities, Institutional and Residential Market France, 2023-2027" report has been added to ResearchAndMarkets.com's offering.
  • The publisher estimates that the Turkish construction industry grew by 5.1% in 2023, owing to the reconstruction of building and infrastructure that damaged by the earthquake in February 2023 coupled with the rising building permits.
  • In March 2023, the European Bank for Reconstruction and Development (EBRD), announced an investment of TRY35 billion ($1.7 billion) to repair water, electricity and other infrastructure facilities in country by 2024.
  • Historical (2018-2022) and forecast (2023-2027) valuations of the construction industry in Turkey, featuring details of key growth drivers.

Your Dependable Navigator through Complex Supply Chain Waters

Retrieved on: 
Friday, February 2, 2024

Despite the challenges posed by the evolving landscape of supply chain logistics, DIZPOT remains steadfast in its dedication to serving clients with efficiency and reliability.

Key Points: 
  • Despite the challenges posed by the evolving landscape of supply chain logistics, DIZPOT remains steadfast in its dedication to serving clients with efficiency and reliability.
  • In the dynamic landscape where global supply chain disruptions continue to pose significant challenges for businesses, DIZPOT stands out as a beacon of reliability and expertise.
  • Thier tailored approach to supply chain management means they don't just respond to the current landscape; but anticipate the turns ahead.
  • Trust in DIZPOT to navigate the complexities of today's supply chain, ensuring your business stays ahead of the curve.

Results of the ECB Survey of Professional Forecasters for the first quarter of 2024

Retrieved on: 
Sunday, February 4, 2024

Headline HICP inflation was expected to decline from 2.4% in 2024 to 2.0% in both 2025 and 2026.

Key Points: 
  • Headline HICP inflation was expected to decline from 2.4% in 2024 to 2.0% in both 2025 and 2026.
  • Expectations for 2024 were revised down by 0.3 percentage points and those for 2025 by 0.1 percentage points.
  • Core HICP inflation, which excludes energy and food, was also revised down for 2024 and 2025.
  • Notes
    - The SPF for the first quarter of 2024 was conducted between 5 and 10 January 2024 and 59 responses were received.

Number of counterfeit euro banknotes remains low in 2023

Retrieved on: 
Sunday, February 4, 2024

- PRESS RELEASE

Key Points: 
  • - PRESS RELEASE
    Number of counterfeit euro banknotes remains low in 2023
    29 January 2024
    - 467,000 counterfeit euro banknotes withdrawn from circulation in 2023, one of the lowest levels ever in proportion to total banknotes in circulation
    - More than 70% of withdrawn counterfeits were €20 and €50 denominations
    - Euro banknotes remain safe and trusted means of payment
    - Authenticity of euro banknotes can be verified using “feel, look and tilt” method
    Some 467,000 counterfeit euro banknotes were withdrawn from circulation in 2023.
  • There is little likelihood of receiving a counterfeit, as the number of counterfeits remains low in proportion to the number of genuine euro banknotes in circulation.
  • In 2023, just 16 counterfeits were detected per million genuine banknotes in circulation, which is one of the smallest proportions since the introduction of euro banknotes (see the chart below).
  • Chart
    Number of counterfeit euro banknotes detected annually per million genuine notes in circulation
    Although the proportion is very small, the actual number of counterfeits increased compared with 2022, when the number of counterfeits was exceptionally low following the coronavirus (COVID-19) pandemic.

ECB steps up climate work with focus on green transition, climate and nature-related risks

Retrieved on: 
Sunday, February 4, 2024

While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.

Key Points: 
  • While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.
  • I develop an extended DSGE model that includes both the financial sector and endogenous housing supply and show that forecasting accuracy significantly improves when data on new houses is included.
  • The findings highlight the necessity of combining model extension and housing supply data for accurate forecasting during economic crises.

Luis de Guindos: Interview with Die Zeit

Retrieved on: 
Sunday, February 4, 2024

While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.

Key Points: 
  • While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.
  • I develop an extended DSGE model that includes both the financial sector and endogenous housing supply and show that forecasting accuracy significantly improves when data on new houses is included.
  • The findings highlight the necessity of combining model extension and housing supply data for accurate forecasting during economic crises.

Results of the December 2023 Survey on credit terms and conditions in euro-denominated securities financing and over-the-counter derivatives markets (SESFOD)

Retrieved on: 
Sunday, February 4, 2024

While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.

Key Points: 
  • While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.
  • I develop an extended DSGE model that includes both the financial sector and endogenous housing supply and show that forecasting accuracy significantly improves when data on new houses is included.
  • The findings highlight the necessity of combining model extension and housing supply data for accurate forecasting during economic crises.

Frank Elderson: Interview with De Volkskrant

Retrieved on: 
Sunday, February 4, 2024

While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.

Key Points: 
  • While existing models have added a financial sector and real estate sector, they have largely overlooked housing supply.
  • I develop an extended DSGE model that includes both the financial sector and endogenous housing supply and show that forecasting accuracy significantly improves when data on new houses is included.
  • The findings highlight the necessity of combining model extension and housing supply data for accurate forecasting during economic crises.