European System of Central Banks

Financial statements of the ECB for 2022

Retrieved on: 
Monday, February 27, 2023

This result takes into account a release of €1,627 million from the provision for financial risks to cover losses incurred during the year.

Key Points: 
  • This result takes into account a release of €1,627 million from the provision for financial risks to cover losses incurred during the year.
  • After the release, the provision for financial risks declined to €6,566 million.
  • Net interest income totalled €900 million in 2022 (2021: €1,566 million).
  • These changes resulted from increases in the interest rate on the Eurosystem’s main refinancing operations to levels above 0% since 27 July 2022.
  • Impairment tests were conducted on the securities held by the ECB in its monetary policy portfolios, which are valued at amortised cost (subject to impairment).
  • *Total staff costs decreased to €652 million *(2021: €674 million), mainly as a result of actuarial valuation gains relating to other long-term benefits.
  • The Eurosystem’s holdings of securities held for monetary policy purposes rose by €224 billion to €4,937 billion (2021: €4,713 billion).
  • APP holdings increased by €130 billion to €3,254 billion and PEPP holdings increased by €100 billion to €1,681 billion.

Fiscal policy implications of euro area countries’ 2023 draft budgetary plans

Retrieved on: 
Monday, January 16, 2023

On 22 November 2022 the European Commission released its opinions on the draft budgetary plans (DBPs) of euro area countries for 2023.

Key Points: 
  • On 22 November 2022 the European Commission released its opinions on the draft budgetary plans (DBPs) of euro area countries for 2023.
  • At that time, the Council also advised euro area countries to adopt differentiated fiscal policies in 2023, in particular recommending countries with high levels of government debt to ensure a prudent fiscal policy.
  • Euro area countries with low or medium levels of government debt were recommended to ensure that the growth in nationally financed current expenditure is in line with an overall neutral policy stance.
  • Euro area countries were also advised to expand public investment for the green and digital transitions and for energy security.
  • These financing sources provide a fiscal impulse to the economy but are not reflected in the budget balances of euro area countries, given that they are recorded equally as both revenue and expenditure.
  • According to the Commission assessment, the DBPs of euro area countries for 2023 are broadly in line with the fiscal policy recommendations of the Council, with a few exceptions.
  • According to the Commission, fiscal policies may become expansionary in 2023 in an environment of still elevated inflation.
  • The aggregate euro area energy support, as embedded in the macroeconomic outlook of the December 2022 Broad Macroeconomic Projections Exercise (BMPE), is estimated at around 2% of GDP.

Tax thy neighbour: local corporate taxes and consumer prices across German regions

Retrieved on: 
Friday, November 11, 2022

The G20 tax accord addresses the above concerns by implementing a 15% lower bound on corporate tax rates across OECD Member countries, which will lead to tax rises in some countries.

Key Points: 
  • The G20 tax accord addresses the above concerns by implementing a 15% lower bound on corporate tax rates across OECD Member countries, which will lead to tax rises in some countries.
  • [2] However, besides affecting shareholders and workers, corporate taxes may have additional distributive implications by affecting consumer prices, a rarely analysed issue (Baker et al., 2020).
  • Firms may use their market power to shield their after-tax profit margins from increases in corporate taxes.
  • These models predict that firms set prices such that they take into account corporate taxes; in particular, that firms raise prices in response to corporate tax hikes, including on products they export across regions.
  • The ultimate effects on consumer prices crucially depend on how much of a given change in producer prices local retailers would pass on in each region.
  • (2022), we provide empirical estimates of the pass-through of local corporate taxes to consumer prices across regions in Germany.
  • The German institutional setting helps the empirical identification of the response of retail prices to changes in corporate taxes of producers.
  • Geographical variation in local corporate tax rates

    Notes: Both graphs show local tax scaling factors across municipalities.

  • Increasing the local corporate tax by one percentage point raises retail prices of locally produced products by 0.4% relative to those originating in other municipalities.
  • Because we relate local tax changes to price changes outside the production municipality, the estimated effect is not contaminated by local shocks that may drive prices and tax rates.
  • The significant price effects documented here show that firms, by charging higher prices to consumers all over Germany, export the effects of local corporate taxes to other regions.
  • Understanding how consumer prices respond to corporate tax changes may increase our general understanding of what determines product-level prices and inflation.

Wolters Kluwer to share finance, risk and regulatory reporting expertise at 2022 FRR Client Conference, Berlin

Retrieved on: 
Tuesday, October 4, 2022

Wolters Kluwer Finance, Risk & Regulatory Reporting (FRR) is preparing to host its 2022 FRR Client Conference for senior decision makers in banking and financial services, providing attendees an opportunity to learn in depth about Wolters Kluwers OneSumX FRR solution roadmaps and to glean insights from across the finance, risk and regulatory reporting space.

Key Points: 
  • Wolters Kluwer Finance, Risk & Regulatory Reporting (FRR) is preparing to host its 2022 FRR Client Conference for senior decision makers in banking and financial services, providing attendees an opportunity to learn in depth about Wolters Kluwers OneSumX FRR solution roadmaps and to glean insights from across the finance, risk and regulatory reporting space.
  • Attendees can engage in detailed discussions via two, dedicated workstreamsone for Risk & Finance topics and trends, such as Basel IV and ESGand the other covering Regulatory Reporting topics, including BIRD and IReF, DPM 3.2, and regulatory reporting challenges.
  • The panelists include Maya Panda, COO, Maya Bank; Tomasz Motyl, CIO, AION Bank; Jeroen Speek, Head of Reporting, BNG; and Wolfgang Prinz, Product Management Director, Wolters Kluwer FRR.
  • Wolters Kluwer FRR, which is part of the companys Governance, Risk & Compliance (GRC) division, is a global market leader in the provision of integrated regulatory compliance and reporting solutions.

ECB publishes an independent review of TARGET incidents in 2020

Retrieved on: 
Thursday, July 29, 2021

28 July 2021

Key Points: 
  • 28 July 2021

    The European Central Bank (ECB) has today published the report that presents the results of Deloittes independent review of incidents that affected TARGET2 and TARGET2 Securities in 2020.

  • The Eurosystems response accepts Deloittes general conclusions and recommendations made in the review and commits to implement them.
  • The ECB announced the launch of an independent review in November 2020 after an incident, which affected TARGET2 on 23 October 2020, caused an extended outage.
  • The independent review describes the incidents in detail, outlines their consequences for TARGET Services participants and identifies their root causes.

Eurosystem launches digital euro project

Retrieved on: 
Saturday, July 17, 2021

14 July 2021

Key Points: 
  • 14 July 2021

    The Governing Council of the European Central Bank (ECB) has decided today to launch the investigation phase of a digital euro project.

  • All of this has led us to decide to move up a gear and start the digital euro project, says ECB President Christine Lagarde.
  • This will not prejudge any future decision on the possible issuance of a digital euro, which will come only later.
  • Experiments were conducted in the four following areas: the digital euro ledger; privacy and anti-money laundering; limits on digital euro in circulation; end-user access while not connected to the internet and facilitating inclusiveness with appropriate devices.