Prior to the global financial crisis starting in 2007, the Eurosystem’s operational framework for implementing monetary policy used to be a corridor system. This involved the ECB Governing Council setting three interest rates, which usually had the same distance from each other. The rates of the deposit facility and the marginal lending facility formed the lower and upper bounds of the corridor, respectively. The relevant key interest rate on the main refinancing operations was the middle of the interest rate corridor. This system aimed to steer short-term money market rates close to the main refinancing operations rate.

With the outbreak of the global financial crisis in 2007 and the turmoil it brought about in the international banking system, trust between commercial banks increasingly dwindled, which significantly hampered the redistribution of liquidity via the interbank market that is necessary for a functioning corridor system. Banks in the euro area began to hoard liquidity or not lend it indiscriminately to banks that were in need of liquidity, meaning that the short-term money market no longer facilitated the smooth distribution of liquidity. The volatility of short-term interest rates went up significantly. As a result, the ECB Governing Council adopted a series of non-standard monetary policy measures, thereby changing the way in which the operational framework is used to implement monetary policy.

Selected papers by Bundesbank researchers accepted for publication or recently published.

Information on trials and experiments already conducted with the Trigger Solution as part of the Eurosystem exploratory work to test new technologies for the settlement of wholesale transactions in central bank money.

The world is becoming increasingly digital – this presents a whole host of challenges for payments in Europe, but also opens up opportunities as a result of innovations. The Bundesbank’s Payments Symposium 2024 saw around 250 experts from the business community, academia and state institutions come together to discuss this topic, including Bundesbank Executive Board member Burkhard Balz and Piero Cipollone, member of the Executive Board of the European Central Bank.