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This study looks at potential windfall profits for the four banking acquisitions in 2023. Based on accounting figures, an FT article states that a total of USD 44bn was left on the table. We see accounting figures as a misleading analysis. By estimating marked-based cumulative abnormal returns (CAR), we find positive abnormal returns in all four cases which when made quantifiable, are around half of the FT’s accounting figures. Furthermore, we argue that transparent auctions with enough bidders ...

Während der Oktober-II-Plenartagung soll das Parlament über seinen Standpunkt zu Abänderungen am Standpunkt des Rates zum Entwurf des EU-Haushaltsplans für 2024 entscheiden. Der Haushaltsausschuss (BUDG) hat seine Lesung des Haushaltsplans 2024 auf seine Forderung nach einer Überarbeitung des Mehrjährigen Finanzrahmens (MFR) 2021-2027 abgestimmt. Der BUDG-Ausschuss kehrt alle vom Rat vorgeschlagenen Kürzungen des Entwurfs der Kommission um und schlägt eine erhebliche Aufstockung der Mittel für Verpflichtungen ...

Die Kommission hat im Juli 2021 eine Verordnung über einen europäischen Standard für grüne Anleihen vorgeschlagen, um Klima- und Umweltprojekte zu unterstützen. Dadurch würde ein offizieller EU-Standard geschaffen, der auf die EU-Taxonomie abgestimmt wäre und auf einem Registrierungssystem und einem Aufsichtsrahmen für externe Bewerter beruhen würde. Auf der Oktober-I-Plenartagung soll über die vorläufige politische Einigung, die zwischen dem Europäischen Parlament und dem Rat erzielt wurde, abgestimmt ...

The interest rate cost of EU borrowing for non-repayable support, which lies with the EU budget, could be twice as high as what was initially estimated at the start of the EU’s 2021-2027 budget cycle. This Bruegel paper finds that the European Commission’s issuance strategy can still be improved to reduce EU borrowing costs at the margin. It should also continue to work on building market infrastructures for EU bonds. Moreover if EU countries want to reap the full benefits of EU borrowing, some political ...

The ECB is now planning to run down its vast bond holdings acquired under the asset purchase programme ----- a ‘‘quantitative tightening’’. However, the ECB is not contemplating selling any bonds, only not reinvesting part of what is coming due. Under this approach, the continuing expansionary effect of keeping vast holdings remains large and is likely to complicate the fight against inflation. The ECB currently has two, fungible, policy instruments (policy rates and balance sheet operations), which ...

Confronted with a historic inflation surge, the ECB steps on the brake(s). While interest rate hikes are its primary tool, unconventional tools are also adjusted to strengthen the brake intensity. Quantitative tightening will reduce the stock of bonds in a slow process. The change from a scarce to an abundant reserve system will prevail. In contrast to previous monetary tightening cycles, in an abundant reserve system huge interest expenses result in central bank losses and fiscal costs for the coming ...

The Eurosystem is now reducing its bond holdings. Provided this is carried out in a measured way, it should not have a big impact on financial conditions or cause financial instability. The reduction is the correct policy because of legal problems with the Eurosystem owning so many sovereign bonds and because it provides space to implement the Transmission Protection Instrument (TPI) effectively. On the costs of operating a large balance sheet, the ECB should re-introduce its tiering system for compensation ...

While greater inflation may have led to some positive “first-round” effects for banks, several negative “second-round” impacts may occur, including: i) an increase in credit risk, affecting both families and companies, especially “heavy energy users”; ii) a drop in the value of fixed-rate assets held by lenders, including sovereign bonds; iii) liquidity pressures due to the ECB’s recent decision to increase the cost of its outstanding 3-year facilities and to greater competition for retail deposits ...

This briefing presents in a tabular manner the EU issuance of bonds and bills to finance the Next Generation EU, notably the Recovery and Resilience Facility.

The IA assesses elements to be added to the 2019 TEG report on a European Green Bond Standard (EU-GBS). The range of options is therefore limited to these additional aspects and does not cover the entire set of rules for green bonds. The IA is based on reliable internal and external research, international data and several stakeholder consultations. While the definition of the objectives could have been more specific, the problem analysis and the assessment of options are overall logical and thorough ...