What is ECB TARGET2?
TARGET2 is the real-time gross settlement (RTGS) system owned and operated by the Eurosystem. Central banks and commercial banks can submit payment orders in euro to TARGET2, where they are processed and settled in central bank money, i.e. money held in an account with a central bank.
What is ECB forward guidance?
Under the conditions we currently face, forward guidance reinforces the Governing Council’s commitment to attaining the inflation target by clarifying that our policy rates will be lifted only if the evidence is sufficiently robust to allow us to see with a high degree of confidence that the inflation rate will reach …
What is a reference rate FX?
Reference exchange rates are a set of daily foreign exchange rates published by leading central banks. Reference exchange rates are used by companies and other participants in FX markets. They are based on a regular daily concertation procedure between the central bank and leading commercial banks.
How is the ECB structured?
Organization Structure of the ECB. There are four decision-making bodies of the ECB that are mandated to undertake the objectives of the institution. These bodies include the Governing Council, Executive Board, the General Council, and the Supervisory Board.
How does ECB set interest rates?
The ECB controls market interest rates via a range of tools, including a weekly lending operation to banks and the use of two “standing facilities”. The Eurosystem conducts a weekly lending operation, known as the “main refinancing operation”, with funds due back a week later.
What is the difference between TARGET and TARGET2?
TARGET2 is even more efficient, secure and stable than TARGET. It has many liquidity management options, such as liquidity reservation and liquidity pooling. National and cross-border payments are processed in the same way, with participants being addressed directly.
What is the purpose of forward guidance?
Forward guidance consists of telling the public not only what the central bank intends to do but what conditions will cause it to stay the course and what conditions will cause it to change its approach.
What is forward guidance used for?
Forward guidance—the issuance by a central bank of public statements concerning the likely future settings of its policy instruments—is widely regarded as a new tool of monetary policy.
What are the changes to the ECB reference rates?
The ECB is changing the publication time of the euro foreign exchange reference rates (ECB reference rates) from around 14:30 CET to around 16:00 CET as of 1 July 2016. The ECB reference rates will continue to be determined using the current methodology, which is based on a point-in-time snapshot at 14:15 CET.
What are the changes to the Euro reference rates?
“Information-only” purpose of the euro foreign exchange reference rates is reaffirmed and strengthened The ECB is changing the publication time of the euro foreign exchange reference rates (ECB reference rates) from around 14:30 CET to around 16:00 CET as of 1 July 2016.
What is the European Central Bank (ECB)?
The ECB has been setting and publishing its reference rates for the euro on a daily basis since the currency was launched in January 1999. These rates are often used for the annual financial statements of corporations, tax returns, statistical reports and economic analyses.
What is a reference rate?
In the context of the euro foreign exchange reference rates, the term “reference rate” is taken to mean an exchange rate that is not intended to be used in any market transactions, whether directly or indirectly (as an underlying benchmark). The rates are intended for information purposes only.