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2 Jan, 18 tweets, 11 min read
Speeches are an important element of central bank communication. After two years at the @ecb’s Executive Board, I would like to present a selection of the most relevant of my (more than 30) speeches in a long thread🧵. 1/18
There are several categories of speeches: (1) on #MonetaryPolicy, explaining current policy considerations, (2) on #Narratives about monetary policy, and on the relationship of monetary policy & (3) #FiscalPolicy, (4) #FinancialStability, (5) #Inequality, (6) #ClimateChange. 2/18
#MonetaryPolicy: There are too many speeches to list them all, so let me select a few: on the ECB’s response to the pandemic (6 Apr 2020), mentioning (AFAIK) the concept of the euro area GDP-weighted yield curve for the first time: 3/18 ecb.europa.eu/press/key/date…
On the @ecb's experience with negative interest rates (26 Aug 2020): ecb.europa.eu/press/key/date…; and on the proportionality of PEPP (27 Jun 2020): ecb.europa.eu/press/key/date… 4/18
On potentially diminishing returns of monetary policy and its side effects, two recurrent themes in my speeches (24 Nov 2020): ecb.europa.eu/press/key/date…; and on “preserving favourable financing conditions” under the PEPP (25 Mar 2021): ecb.europa.eu/press/key/date… 5/18
On the euro area hopefully escaping the low inflation – low growth environment (3 Jul 2021): ecb.europa.eu/press/key/date…; and on our new monetary policy strategy (14 Jul 2021): ecb.europa.eu/press/key/date… 6/18
On the changing role of asset purchases (20 Sep 2021): ecb.europa.eu/press/key/date…; and on the return of inflation and the appropriate monetary policy response in times of high uncertainty “Reflation, not stagflation” (17 Nov 2021): ecb.europa.eu/press/key/date… 7/18
#Narratives: My narratives speeches are directed at a broader public and try to dispel misleading narratives on monetary policy in order to encourage a factual discourse. The first is my Karlsruhe speech (11 Feb 2020): ecb.europa.eu/press/key/date… 8/18
... and the second my Baden-Baden speech on inflation (13 Sep 2021), which remains broadly valid in spite of strong inflation surprises since then: ecb.europa.eu/press/key/date… 9/18
#FiscalPolicy: One speech is on some misconceptions on fiscal dominance (11 Sep 2020): ecb.europa.eu/press/key/date…; another one on the need for “Unconventional fiscal and monetary policy at the zero lower bound” (26 Feb 2021): ecb.europa.eu/press/key/date… 10/18
#FinancialStability: One speech discusses the risks from the non-bank sector that became apparent in the COVID-19 crisis (19 Nov 2020): ecb.europa.eu/press/key/date…; another one is on the impact of non-banks on monetary policy transmission (24 Aug 2021): ecb.europa.eu/press/key/date… 11/18
One speech deals with a new sovereign-bank-corporate nexus, which so far has turned out virtuous rather than vicious (28 Jan 2021): ecb.europa.eu/press/key/date…; and one with the relationship of monetary policy and financial stability (8 Dec 2021): ecb.europa.eu/press/key/date… 12/18
#Inequality: One speech deals with the effects of the pandemic on inequality “Unequal scars” (18 Sep 2020): ecb.europa.eu/press/key/date…; another one discusses the relationship of monetary policy and inequality (9 Nov 2021): ecb.europa.eu/press/key/date… 13/18
My speech on why “Women are central, not just in central banks” essentially also deals with an aspect of inequality that is very dear to my heart, and what the ECB is doing about it (28 Sep 2020): ecb.europa.eu/press/key/date… 14/18
#ClimateChange: Several speeches are devoted to the role of monetary policy in fighting climate change. My first speech on this topic discusses why monetary policy may have a role to play “Never waste a crisis” (17 Jul 2020): ecb.europa.eu/press/key/date… 15/18
Several speeches question the market neutrality principle: “When markets fail” (28 Sep 2020): ecb.europa.eu/press/key/date…; and “From market neutrality to market efficiency” (14 Jun 2021): ecb.europa.eu/press/key/date… 16/18
A further speech discusses the constraints of a “green” monetary policy in order to avoid that we move “from green neglect to green dominance” (3 March 2021): ecb.europa.eu/press/key/date…; another speech on climate change is coming up on January 8 (American Finance Association). 17/18
Almost all my speeches are accompanied by slides, which can be found on the @ecb's website (at the very end of each speech or on the speeches website as Annex). Thanks to the team @ecb for their extraordinary support! And stay tuned in #2022! 18/18

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More from @Isabel_Schnabel

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20 May 21
Today we @ecb issued our new digital publication and interactive tool on inflation. It is one of our attempts to better explain the concept & measurement of inflation, its heterogeneity across goods and countries as well as the difference between perceived & actual inflation. 1/8
Chapter 1 explains the concept of inflation and why it matters. You can look at the inflation rate in a particular country for a particular category of goods and services, which gives an impression of the heterogeneity across countries and goods. 2/8
It also show the evolution over time for different countries, distinguishing the overall price index and certain subcategories, which show very different degrees of volatility: food, energy, non-energy industrial goods and services. 3/8
Read 9 tweets
Isabel Schnabel Profile picture
9 Apr 21
In an interview with @derspiegel, conducted by @Bartz70Tim & @KaiserSte, I talk about recent inflation developments, monetary and fiscal policy in the pandemic, the @ecb’s role in combating climate change and financial stability. Below you find some key messages. 1/14
As we are still far from reaching our inflation aim of below, but close to, 2%, a sustainable rise of inflation in the direction of 2% would be good news. That would mean that the economy is gaining momentum and aggregate demand is increasing. 2/14
However, inflation is currently rising on the back of many one-off effects, like base effects in oil prices and the VAT rise in Germany. Our projections show that the rate of inflation will ease again in 2022, because aggregate demand will presumably remain weak. 3/14
Read 14 tweets
Isabel Schnabel Profile picture
15 Mar 21
For those of you looking at weekly #PEPP purchase numbers, let me give you a brief explainer how to read our numbers. For PEPP, there are three types of publications: weekly, monthly and bimonthly. #NerdyThread #ECBWatchers #Servicetweet @ecb 1/11 ecb.europa.eu/mopo/implement…
On Mondays at 15:45 CET, we publish the Eurosystem’s PEPP holdings (at amortised cost), as of the previous Friday, on our website: 2/11
By taking the difference to the previous week, one obtains the *net* purchases for the previous trading week. This is the difference between gross purchases *settled* in that week (i.e. traded two trading days earlier, so from THU to WED) and redemptions (from MON to FRI). 3/11
Read 11 tweets
Isabel Schnabel Profile picture
15 Nov 20
Large-scale government & central bank interventions in the COVID-19 crisis have revived the debate on the alleged "zombification" of the economy if unviable firms are kept alive. In our recent VoxEU column with @laeven_luc & @gschepen, we survey the existing literature. 1/14
Why would banks lend to "zombie firms"? On the dark side, low-capitalised banks may engage in the "evergreening" of loans to avoid loss recognition. On the bright side, banks may lend to preserve valuable relationships, which can also avoid disruptions of supply chains. 2/14
A "zombification" of the economy can lead to a drop in productivity through credit misallocation: either mechanically by reducing aggregate productivity, or through a crowding-out effect when "zombie lending" tightens the credit constraints of high-productivity firms. 3/14
Read 14 tweets
Isabel Schnabel Profile picture
20 Sep 20
On Friday, I gave a speech at Deutscher @juristentag about the distributional effects of the COVID-19 pandemic and the danger of “unequal scars”. My goal was to add a European dimension to the debate. Here is my usual Twitter summary, including some of the charts. 1/11
The pandemic is a global shock that hit all euro area countries almost simultaneously. But it has become increasingly clear that the pandemic has very different impacts on different countries, as can be seen from the @EU_Commission’s forecast of economic growth. 2/11
There is a negative correlation between the projected fall in GDP for 2020 and (a) the extent of government-imposed restrictions, measured by the Oxford Stringency Index, and (b) the dependency on tourism. 3/11
Read 11 tweets
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26 Aug 20
Today I gave a speech on the @ecb’s negative interest rate policy (NIRP) at the @EEANews Annual Congress in a panel with @helene_rey, Tobias #Adrian & Rafael #Repullo. In the speech, I could draw on fantastic ECB research, featuring @AngelaMaddaloni , @fheider & many others. 1/6
The NIRP helped to shift the perceived lower bound on interest rates into negative territory, supported by forward guidance that left the door open for further rate cuts. The zero lower bound was transformed into an effective lower bound below zero. 2/6
NIRP contributed to shifting € area sovereign yields down across the maturity spectrum. Due to a “hot potato effect”, NIRP compresses the term premium, reinforces the effects of asset purchases & supports bank lending. All these effects have improved monetary transmission. 3/6
Read 6 tweets

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