Latest news with #Eurosystem
Reuters
15-05-2025
- Business
- Reuters
Bundesbank backs simplifying banks' capital requirements
FRANKFURT, May 15 (Reuters) - The Bundesbank's top bank supervisor on Thursday backed simplifying Europe's capital requirements for lenders, while stressing this does not mean lowering them. "We are therefore committed, within the European Union and the Eurosystem, to simplifying the current capital framework," Michael Theurer told a conference organised by the German central bank. "I hope that we will succeed in this with our European partners. However, it would be premature to say exactly where this will lead."
Euronews
07-03-2025
- Business
- Euronews
DHL's shares soar 10% as it announces savings plan and job cuts
The European Central Bank cut its benchmark interest rate by a quarter point to 2.5% on Thursday as inflation nears 2% and growth remains weak. ADVERTISEMENT The ECB reduced its interest rates on Thursday afternoon during its March meeting, as analysts had anticipated. The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.50%, 2.65% and 2.90% respectively, with effect from 12 March 2025. The interest rate on the main refinancing operations is the rate banks pay when they borrow money from the ECB for one week, while the rate on the deposit facility is what banks can use to make overnight deposits with the Eurosystem. The rate on the marginal lending facility, meanwhile, offers overnight credit to banks from the Eurosystem. "Monetary policy is becoming meaningfully less restrictive, as the interest rate cuts are making new borrowing less expensive for firms and households and loan growth is picking up," the ECB said in a statement. "At the same time, a headwind to the easing of financing conditions comes from past interest rate hikes still transmitting to the stock of credit, and lending remains subdued overall. The economy faces continued challenges and staff have again marked down their growth projections – to 0.9% for 2025, 1.2% for 2026 and 1.3% for 2027." Stubborn inflation The decision comes after inflation cooled to 2.4% in the eurozone in February, higher than the forecasted 2.3%. While price pressures are nearing the ECB's 2% target, the total was predominantly driven up by services inflation - which came to 3.7% year-on-year. On a monthly basis, consumer prices also rose 0.5% from January, the steepest increase seen since April 2024. Looking ahead, the prospect of a trade war with the US raises the chance that these totals could rise. US President Donald Trump is threatening a 25% tariff on EU imports and the bloc has warned it would retaliate with its own levies. Another factor complicating the eurozone's economic future is Russia's war in Ukraine. With the new US administration pulling back military support for the EU, member states must raise their own military budgets, pushing up spending and debt levels. "It's not impossible" that Thursday's rate cut is the last in the cycle, said Sylvain Broyer, Chief EMEA Economist at S&P Global Ratings. "Upside risks to inflation remain, especially via wages, and if you look at the bank lending survey, the flow of new loans or the breakdown of money growth, the empirical evidence suggests that ECB rates are already no longer constraining demand." ADVERTISEMENT "How Europe will finance its defence efforts - should it be more by using the headroom in the EU budget and leveraging private savings through the EIB balance sheet, rather than by relaxing EU fiscal rules to allow governments to run higher deficits - is also important to the ECB," Broyer added. Stuttering growth While managing these risks, policymakers are also conscious of lacklustre growth across the eurozone. In the final quarter of 2024, seasonally adjusted GDP increased by 0.1% quarter-on-quarter in the eurozone and by 0.2% in the EU, according to Eurostat. 'The euro-zone economy performed a little better than previously thought in Q4, but growth was still extremely weak and the early signs are that it got off to a slow start to 2025,' Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said. ADVERTISEMENT 'The key point is that a 0.1% expansion is hardly something to get excited about,' he added. Across the Atlantic, the Federal Reserve will be making its next monetary policy decision on 19 March. It's forecasted that US interest rates will be cut two or three times in 2025, although these moves may come later in the year.
Euronews
06-03-2025
- Business
- Euronews
ECB cuts rates for sixth time since June despite sticky inflation
The ECB reduced its interest rates on Thursday afternoon during its March meeting, as analysts had anticipated. The interest rates on the deposit facility, the main refinancing operations and the marginal lending facility will be decreased to 2.50%, 2.65% and 2.90% respectively, with effect from 12 March 2025. The interest rate on the main refinancing operations is the rate banks pay when they borrow money from the ECB for one week, while the rate on the deposit facility is what banks can use to make overnight deposits with the Eurosystem. The rate on the marginal lending facility, meanwhile, offers overnight credit to banks from the Eurosystem. QUOTE, the ECB said in a statement. Bank of America economist Ruben Segura-Cayuela had earlier described Thursday's decision as the "last easy rate cut". Stubborn inflation The decision comes after inflation cooled to 2.4% in the eurozone in February, higher than the forecasted 2.3%. While price pressures are nearing the ECB's 2% target, the total was predominantly driven up by services inflation - which came to 3.7% year-on-year. On a monthly basis, consumer prices also rose 0.5% from January, the steepest increase seen since April 2024. Looking ahead, the prospect of a trade war with the US raises the chance that these totals could rise. US President Donald Trump is threatening a 25% tariff on EU imports and the bloc has warned it would retaliate with its own levies. Another factor complicating the eurozone's economic future is Russia's war in Ukraine. With the new US administration pulling back military support for the EU, member states must raise their own military budgets, pushing up spending and debt levels. Stuttering growth While managing these risks, policymakers are also conscious of lacklustre growth across the eurozone. In the final quarter of 2024, seasonally adjusted GDP increased by 0.1% quarter-on-quarter in the eurozone and by 0.2% in the EU, according to Eurostat. 'The euro-zone economy performed a little better than previously thought in Q4, but growth was still extremely weak and the early signs are that it got off to a slow start to 2025,' Jack Allen-Reynolds, deputy chief eurozone economist at Capital Economics, said. 'The key point is that a 0.1% expansion is hardly something to get excited about,' he added. Across the Atlantic, the Federal Reserve will be making its next monetary policy decision on 19 March. It's forecasted that US interest rates will be cut two or three times in 2025, although these moves may come later in the year.
Khaleej Times
27-02-2025
- Business
- Khaleej Times
ECB's $1.9 trillion-a-day trade system suffers outage
The European Central Bank said on Thursday its system that handles $1.9 trillion a day in transactions across the region was suffering an outage, leaving banks and companies scrambling to figure out the potential impact. The Bank of Greece, one of the 24 central banks that uses the system, said the outage meant interbank fund transfers were "not currently possible". The ECB said an emergency channel was still open for "very critical payments". The pan-European TARGET 2 Securities (T2S) platform, which is used to complete trades in cash and securities across the 24 countries that share the euro, along with the central banks and the ECB itself, reported a glitch in its communication channels, but did not offer more specifics. Trading sources said communications had been disrupted and the status of trades since the outage was reported remained unclear. The problem affected critical communications between central securities depositories (CSDs), the basic plumbing of financial markets. Market participants usually communicate with T2S via their CSD or central bank. Michael Thomas, a partner at Hogan Lovells' financial services team and market structure expert, said the incapacity of the settlement system could have a wide variety of potential consequences. "Where there are chains of transactions, where each leg is dependent on settlement of each other leg, a break in the chain can affect the whole series of transactions," he said. "The longer the delay, the greater the impact on liquidity in the financial system, where cash cannot be realised because securities transactions are not able to settle, meaning that cash is not available for other purposes," he said. According to the ECB's website, any issues with the T2S system in the past couple of years have typically been resolved relatively quickly. Thursday's outage was reported at 0730 GMT and was still continuing by 1540 GMT. "The Eurosystem is taking all measures necessary to resolve the incident as soon as possible," the ECB said, promising a further update at 1600 GMT. European stock, currency and bond markets appeared to be trading normally, according to LSEG data. Settlement on trades takes two working days, which might mean disruption may not show up until early next week. One London-based trader said their team had little precedent for such an outage, with the ECB under extreme pressure to restore operations before the 1600 GMT cut-off. Central counterparties, or clearing houses, ensure that a stock, bond or derivatives transaction is completed. The final leg of a trade, known as settlement, is conducted by the CSDs. One CSD, Clearstream, said on its website that settlement of euro securities would be delayed, Others including Euroclear did not immediately respond to a request for comment from Reuters. A person familiar with the matter said some Euroclear clients might see delays in the processing of their transactions.
Reuters
27-02-2025
- Business
- Reuters
Eurosystem cites incident in T2S system, settlement unaffected, ECB says
LONDON, Feb 27 (Reuters) - The European Central Bank said on Thursday its securities settlement system was facing an outage that had impacted two-way communications within its network but settlement itself was not affected. The ECB said it had closed communication channels with its network service providers for its pan-European TARGET 2 Securities, or T2S, platform. "The incident does not have any impact on life cycle management and matching, settlement, penalty mechanism processing, reference data management," the ECB said in a statement. The central bank said the Eurosystem was taking all measures necessary to resolve the incident as soon as possible and would provide an update by 1200 CET (1100 GMT). European stock, currency and bond markets appeared to be trading normally on Thursday morning, LSEG data showed (.STOXX), opens new tab, , . Get a look at the day ahead in U.S. and global markets with the Morning Bid U.S. newsletter. Sign up here.
