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Floods in Germany: No impact on ECB policy

In August 2002 Germany was hit by one of its most severe floods in more than a century, causing total estimated damages of €9.2bn (around 0.4% of GDP). While the current floods are unlikely to be as damaging as those...

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Weakness in the euro area's core: Structural or cyclical?

The ECB’s decision in early May to cut its key policy rate to a new record low mainly reflected the deteriorating economic outlook in the euro area’s core. Today’s GDP figures provided a timely reminder of the challenges faced by...

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ECB policy: Looking at the negatives

Last week’s ECB meeting was, to the extent that it offered nothing more concrete than a 25bp cut in the refinancing rate, a disappointment. But markets were mollified by Draghi’s hint in his press conference of further rate...

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ECB: Filling the BoJ's old boots?

The fallout from the financial crisis has changed monetary policy beyond recognition, with central banks finding themselves doing things that were previously taboo...

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ECB: Reloading the conventional measures

As expected, the ECB today cut its main refinancing rate by 25bps to a new record low of 0.5%. It also lowered the interest rate on its marginal lending facility by 50bps to 1.0%, narrowing the interest rate corridor...

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