ECB欧洲央行-Feedback-on-the-input-provided-by-the-European-Parliament-as-part-of-its-resolution-on-the-ECB-Annual-Report-for-2017_11页_213kb

Summary of ECB Feedback on the European Parliament's Resolution on the 2017 Annual Report

Core Content

The ECB provided feedback on the European Parliament's resolution regarding its 2017 Annual Report, which was adopted in January 2019. The feedback addresses various aspects of the ECB's monetary policy, economic and financial stability outlook, banking union and capital markets union, market infrastructures and payments, and institutional matters. The ECB aims to clarify its stance, respond to concerns, and justify its actions in line with its mandate and independence.

Main Points and Key Information

1. ECB's Monetary Policy

• Effectiveness: The ECB asserts that its monetary policy measures have significantly improved financial conditions for companies and households, contributing to higher economic growth and inflation.
• Side Effects: While potential side effects of unconventional policies (e.g., negative interest rates and asset purchases) are monitored, they have remained limited. Credit developments and distributional effects have not indicated major resource misallocation or adverse impacts in the short term.
• Bank Profitability: The ECB notes that bank profitability, measured by return on equity, has gradually improved since 2014, although it remains low compared to global peers. The ECB's measures have helped mitigate the negative effects of low interest rates.
• Corporate Sector Purchase Programme (CSPP): The CSPP has had a positive impact on the real economy by easing financing conditions, reducing corporate bond spreads, and improving primary market conditions. It has also indirectly supported small and medium-sized enterprises (SMEs) through increased bank lending.
• Targeted Longer-Term Refinancing Operations (TLTROs): TLTROs have contributed to favorable financing conditions, with participating banks increasing lending to non-financial corporations (NFCs) more significantly than non-participating banks. TLTRO-II and TLTRO-III include incentives to maintain favorable credit conditions.
• Environmental and ESG Criteria: The ECB supports integrating ESG considerations into its operations, though it does not have an explicit environmental target. Green bonds have been purchased under CSPP and PSPP, supporting their issuance and reducing yields. The ECB is also exploring responsible investment criteria for its own funds portfolio.
• Transparency: The ECB regularly publishes detailed information on its asset purchase programmes, including holdings, purchases, and redemption amounts. It emphasizes that overly detailed disclosures could undermine the effectiveness of these programmes by introducing market distortions and fragmentation.

2. Economic and Financial Stability Outlook

• Structural Reforms: The ECB agrees that structural reforms are essential to enhance growth potential and reduce vulnerabilities. It encourages countries to increase efforts to achieve a more growth-friendly fiscal composition.
• Property Prices and Macroprudential Policy: The ECB acknowledges concerns about rising property prices and supports the use of macroprudential instruments to address vulnerabilities, especially in residential real estate sectors. It notes that macroprudential policies are adequate in most vulnerable countries.
• ESRB Recommendations: The ECB supports the ESRB's call for new macroprudential instruments for non-banks, including liquidity mismatches in investment funds and leverage limits.

3. Banking Union and Capital Markets Union (CMU)

• Capital Markets Union: The ECB supports the CMU project and advocates for its completion to enhance financial integration and resilience.
• European Deposit Insurance Scheme (EDIS): The ECB endorses EDIS as a means to strengthen financial stability and promote risk sharing. It sees EDIS as a key component of a fully integrated banking union.
• Brexit Preparedness: The ECB emphasizes the importance of preparing for all Brexit scenarios, including a no-deal Brexit. It has been working with the Bank of England to assess risks and has supported regulatory measures to ensure financial stability.

4. Market Infrastructures and Payments

• DLT and Cyber Risks: The ECB actively monitors developments in distributed ledger technology (DLT) and cyber risks, engaging in projects like Stella with other central banks.
• Central Bank Digital Currencies (CBDCs): The ECB agrees to study the implications and potential reasons for issuing CBDCs, including their impact on monetary policy transmission and financial stability.
• Physical Money: The ECB reaffirms the importance of physical money and its legal tender status under the TFEU. It notes the continued circulation of euro banknotes, underscoring their relevance.
• International Role of the Euro: The ECB supports the completion of Economic and Monetary Union, which it believes will enhance the euro's role as an international investment, financing, and settlement currency.

5. ECB Institutional Issues

• Accountability and Transparency: The ECB acknowledges the improvements in accountability and transparency, including increased frequency of interactions with the European Parliament and a new accountability framework.
• Gender Balance: The ECB has implemented measures to improve gender diversity, including requiring at least one woman in each business area's senior management team and a minimum of one-third in management teams.
• SMP Profits Disclosure: The ECB provided a detailed table of profits from the Securities Markets Programme (SMP), including holdings and income by country. The SMP was designed to restore market depth and liquidity, while the APP aims to provide additional monetary stimulus.
• Transparency International Recommendations: The ECB has implemented several recommendations, including revising the Audit Committee's mandate and introducing a Code of Conduct with transparency and accountability provisions. Some recommendations, such as a public whistle-blowing policy, are still under consideration.

Conclusion

The ECB's feedback highlights its alignment with the European Parliament's concerns and underscores its commitment to transparency, accountability, and the stability of the euro area financial system. It also outlines the effectiveness of its monetary policy measures, the importance of structural reforms, and its proactive stance on emerging financial challenges such as DLT, CBDCs, and Brexit risks. The ECB remains focused on fulfilling its mandate while engaging in constructive dialogue with EU institutions and stakeholders.