European Central Bank

The heterogenous transmission of monetary policy to household credit

11/12/2025 European Central Bank Central banks

Monetary policy affects household credit heterogeneously through multiple channels. On the supply side, monetary policy tightening is typically thought to have a more adverse effect on lower-income households. The ECB Consumer Expectations Survey supports this assumption, with lower-income households reporting tighter constraints on credit access and higher consumer loan rejection rates than households with higher incomes during the recent tightening period.

The 2021-23 high inflation episode and inequality: insights from the Consumer Expectations Survey

11/12/2025 European Central Bank Central banks

This article uses data from the Consumer Expectations Survey to examine the inflation episode of 2021-23, the mortgage rate responses and the perceived and actual effects of these developments on inequality. Public perceptions of inequality rose sharply during the inflation surge, with 73% of households reporting an increase. Cost-of-living pressures were cited as the main driver. By contrast, standard measures of income, wealth and consumption inequality calculated using data from the survey remained broadly stable in the euro area between 2022 and 2025.

Shifts in OPEC+ behaviour and downside risks to oil prices

11/11/2025 European Central Bank Central banks

Oil prices have declined in recent months owing to a persistent oversupply in the market. A key driver has been a shift in the stance of OPEC+. The group has been increasing oil supply at a rapid pace despite already low prices, marking a clear departure from its historical role as a market stabiliser. A similar shift in behaviour occurred in 2014, when oil prices declined sharply and remained persistently low. This box evaluates the risk of a similar scenario unfolding today.

A machine learning approach to real time identification of turning points in monetary aggregates M1 and M3

11/11/2025 European Central Bank Central banks

Monetary aggregates provide valuable information about the monetary policy transmission and the business cycle. This paper applies machine learning methods, namely Learning Vector Quantisation (LVQ) and its distinction-sensitive extension (DSLVQ), to identify turning points in euro area M1 and M3. We benchmark performance against the Bry–Boschan algorithm and standard classifiers. Our results show that LVQ detects M1 turning points with only a three-month delay, halving the six-month confirmation lag of Bry–Boschan dating.

A machine learning approach to real time identification of turning points in monetary aggregates M1 and M3

11/11/2025 European Central Bank Central banks

Monetary aggregates provide valuable information about the monetary policy transmission and the business cycle. This paper applies machine learning methods, namely Learning Vector Quantisation (LVQ) and its distinction-sensitive extension (DSLVQ), to identify turning points in euro area M1 and M3. We benchmark performance against the Bry–Boschan algorithm and standard classifiers. Our results show that LVQ detects M1 turning points with only a three-month delay, halving the six-month confirmation lag of Bry–Boschan dating.

Joining forces: why banks syndicate credit

11/11/2025 European Central Bank Central banks

Banks can grant loans to firms bilaterally or in syndicates. We study this choice by combining bilateral loan data with syndicated loan data. We show that loan size alone does not adequately explain syndication. Instead, banks’ ability to manage risks and firm riskiness drive the choice to syndicate. Banks are more likely to syndicate loans if their risk-bearing capacity is low and if screening and monitoring come at a high cost. Syndicated loans are more expensive and more sensitive to loan risk than bilateral loans.

Joining forces: why banks syndicate credit

11/11/2025 European Central Bank Central banks

Banks can grant loans to firms bilaterally or in syndicates. We study this choice by combining bilateral loan data with syndicated loan data. We show that loan size alone does not adequately explain syndication. Instead, banks’ ability to manage risks and firm riskiness drive the choice to syndicate. Banks are more likely to syndicate loans if their risk-bearing capacity is low and if screening and monitoring come at a high cost. Syndicated loans are more expensive and more sensitive to loan risk than bilateral loans.

China’s growing trade surplus: why exports are surging as imports stall

11/11/2025 European Central Bank Central banks

Debate over China’s growing trade surplus has resurfaced amid US-China trade tensions, geoeconomic shifts and global imbalances. This box shows that the surplus reflects two distinct dynamics: persistently weak imports and surging exports. On the import side, structural policies promoting domestic substitution, trade restrictions and sluggish demand have curbed demand for foreign goods. On the export side, subdued domestic demand has led firms to redirect excess production capacity abroad, consistent with the “vent-for-surplus” mechanism.

Hitting record highs: unpacking support for the euro

11/10/2025 European Central Bank Central banks

In the latest round of the European Commission’s biannual Standard Eurobarometer survey, a record 83% of euro area respondents expressed support for the euro – the highest level since the introduction of the single currency. Using the survey microdata, we show that this rise is broad-based across countries and sociodemographic groups, and that cross-country differences have narrowed significantly.

Household borrowing and monetary policy transmission: post-pandemic insights from nine European credit registers

11/10/2025 European Central Bank Central banks

We study heterogeneity in households’ credit across nine European countries (Belgium, Spain, Hungary, Ireland, Italy, Latvia, Lithuania, Portugal, and Slovakia) during 2022-2024 using granular credit register data. We first document substantial between- and within-country variation in mortgage and consumer lending by borrower age, loan maturity, and interest rate fixation. We then quantify the passthrough of the ECB’s recent tightening cycle to household borrowing costs, and assess its heterogeneous impact across households.

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