In 2022, the European Central Bank (ECB) introduced the Transmission ProtectionInstrument (TPI) to counter the risk of financial fragmentation following the normalisation ofmonetary policy. The ECB has specified conditions under which the TPI can be activated.This paper examines these conditions...

After almost four decades of price stability, inflation has recently approached historical highs. Initially driven by global energy and food price increases, the magnitude of the surge in inflation caught central banks and markets by surprise. Price pressures are now increasingly broadening to...

Although there are currently four retail central bank digital currencies in circulation, no central bank has yet issued the wholesale form of a central bank digital currency. There are good reasons to do so, however, and central banks have already conducted projects in this area. A wholesale...

Credibility of the revised fiscal rules will be crucial so that vulnerable countries can benefit from confidence effects. National ownership will be key in that respect and can be supported via a stronger role of independent national fiscal institutions.

The key to understanding the series of supply shocks that have hit inflation is the nature of the COVID-19 recession.

Euro area inflation has been rising strongly in the wake of the COVID-19 pandemic, giving rise to concerns that there could be second-round effects, with higher inflation leading to higher inflation expectations, which in turn lead to higher inflation. This could result in more persistent rises...