On the Council recommendation for appointment of the VicePresident of the European Central Bank

(N10-0003/2026 – C100018/2026 – 2026/0801(NLE))

(Consultation)

The European Parliament,

–having regard to the Council’s recommendation of 30 January 2026 (N10-0003/2026),

–having regard to Article 283(2), second subparagraph, of the Treaty on the Functioning of the European Union, pursuant to which the European Council consulted Parliament (C100018/2026),

–having regard to Rule 134 of its Rules of Procedure,

–having regard to the report of the Committee on Economic and Monetary Affairs (A100000/2026),

A.whereas, by letter of 30 January 2026, the European Council consulted Parliament on the appointment of Boris Vujčić as VicePresident of the European Central Bank for a term of office of 8 years, with effect from 1 June 2026;

B.whereas Parliament’s Committee on Economic and Monetary Affairs then proceeded to evaluate Boris Vujčić’s credentials, in particular in view of the requirements laid down in Article 283(2) of the Treaty on the Functioning of the European Union and in the light of the need for full independence of the ECB pursuant to Article 130 of that Treaty; whereas in carrying out that evaluation, the committee received a curriculum vitae from Boris Vujčić as well as the replies to the written questionnaire that had been sent;

C.whereas the committee subsequently held a hearing with Boris Vujčić on 25 February 2026, at which he made an opening statement and then responded to questions of the members of the committee;

1.Delivers a [favourable/negative] opinion on the Council recommendation to appoint Boris Vujčić as VicePresident of the European Central Bank (and requests that the recommendation be withdrawn and that a new one be submitted to Parliament);

2.Instructs its President to forward this decision to the European Council, the Council and the governments of the Member States.

Croatian National Bank

Governor

Date of Birth: 2 June 1964

Education:

1996: Ph.D. Faculty of Economics, University of Zagreb

1995-1996: Certificate, In-service training at the European Commission, DG II - Economic and Financial Affairs, Monetary Matters Department, Brussels

1994-1995: Predoctoral Fulbright Scholar, Department of Economics Michigan State University

1991: Master's Degree of Economics, Faculty of Economics, University of Zagreb 1989: Certificate, CIHEAM, University of Montpellier, France, (computer advanced research in economics, EC scholarship)

1988: Baccalaureus Degree of Economics, Faculty of Economics, University of Zagreb

Career:

1989: Assistant Professor, University of Zagreb, Faculty of Economics

1992: Visiting fellow at the Institute of Development Studies - University of Sussex, Brighton

1993: Visiting lecturer at the University of Freiberg, Germany 1994: Visiting scholar at the University of Kentucky, USA

1994-1995: External Collaborator for the International Labor Organization (ILO) 1996: Consultant to the European Commission, DG II - Economic and Financial Affairs

1997-2000: Director, Research Department, Croatian National Bank 2000-2006: Deputy Governor, Croatian National Bank

2006-2012: Second term Deputy Governor, Croatian National Bank 2012-2018: Governor, Croatian National Bank

since 2018: Second term, Governor, Croatian National Bank since 2024: Third term, Governor, Croatian National Bank

Selected professional activities:

since 2003: Professor, University of Zagreb, Faculty of Economics,

since 2004: Visiting Professor at the Faculty of Mathematics, University of Zagreb

2005-2012: Deputy Chief Negotiator with European Union in Croatia’s accession talks 2006-2012: Member of the Managing Board of the Global Development Network since 2013: Member of the General Council of the ECB

since 2013: Member of the General Board of the ESRB

since 2016: Chairman of the Steering Committee of the Vienna Initiative 2016-2019: Member of the Steering Committee of the ESRB

since 2023: Member of the Governing Council of the ECB

Selected professional recognitions:

2018: The best governor in Central and Eastern Europe by Emerging Markets 2019: The best world governor by The Banker (Financial Times) in 2019 2021: The Lamfalussy Award for a lifetime achievement in the field of finance

Questionnaire to the candidate for the position of

Vice-President of the European Central Bank

A. Personal and professional background

1. Please highlight the main aspects of your professional skills in monetary, economic and financial matters and the main aspects of your European and international experience.

Throughout my career – and I have been a career central banker – I have worked at the intersection of economic analysis, monetary policymaking, financial stability and European policymaking. This has given me a broad and practical understanding of monetary policy, macroeconomic developments, and the institutional dynamics of the European Union. I have had the privilege of working in environments where economic judgement must be combined with political awareness, analytical rigour and clear communication – skills that I consider essential for contributing effectively to the work of the ECB.

My professional path has consistently centred on economic and financial policy, since I joined the Croatian National Bank (Hrvatska narodna banka, HNB) in 1996 as Director of the Research Department. During my Deputy Governor tenures (2000-2012), together with my colleagues I pioneered macroprudential tools and worked decisively on the consolidation of the banking system in Croatia, which helped Croatia to weather the Global Financial Crisis with no need for bank recapitalisations (i.e. zero cost for the budget and taxpayers). In parallel, I played one of the pivotal roles during Croatia's accession to the EU, as Deputy chief negotiator. After I was appointed to the position of Governor in 2012 (now I serve my third term), Croatia successfully joined the Banking Union and the euro area. I have also been actively advocating and promoting cross-border banking cooperation, including cooperation of regional supervisors and international counterparts under the Vienna Initiative 2.0, which I have chaired since 2016. These roles required a strong grasp of macro-financial linkages, the interaction between markets and institutions, and practical challenges of designing effective policy frameworks.

Against this background, I have gained significant international and European experience. I have represented my institution in dialogues with EU institutions, Member States and international partners, and have worked in settings where aligning national perspectives with European priorities is essential. These experiences have given me a deep appreciation for the complexity of consensusbuilding in the EU, and for the importance of institutions like the ECB in maintaining stability, predictability and trust across the Union.

Across all these roles, I have learned that effective policymaking requires not only strong analytical foundations, but also the ability to listen, to explain complex issues clearly, and to build bridges across different viewpoints. These are qualities that I would bring to the ECB, together with a strong commitment to Europe and to the principles that underpin our monetary union.

2. Do you have any business or financial holdings or any other commitments which might conflict you with your prospective duties, and are there any other relevant personal or other factors that need to be taken account of by the Parliament when considering your nomination?

No.

3. What would be the guiding objectives you will pursue during the mandate at the European Central Bank (ECB)?

If entrusted with a mandate at the ECB, my guiding objective would be to contribute to a monetary policy that serves all citizens of the euro area. This means keeping a clear and unwavering focus on price stability – our primary objective – and safeguarding financial stability, which is essential for the effective transmission of monetary policy and for the resilience of our economies.

My professional background has shaped this conviction. I have served as the Croatian National Bank's Governor or Deputy Governor continuously since July 2000. During this long period of time, Croatia has been confronted with several major shocks and crises that threatened to destabilise our economy and the financial system. Despite the small size and the inherent vulnerability of the Croatian economy, we managed to weather all these shocks on our own, without relying on external financial support. Having a clear focus on the central bank's objectives and acting promptly with available instruments when those objectives are in danger have been key to our success in that regard. These lessons are directly applicable at the euroarea level: even in a much larger and more complex monetary union, clarity of purpose remains the cornerstone of effective central banking.

The ECB has demonstrated this repeatedly since its creation. It has built a sound reputation as a powerful crisis manager, having played a key role in tackling major crises, most notably the euro area sovereign debt crisis and the pandemic crisis. More recently, it delivered on its primary objective when it successfully curbed high inflation by shifting to tight monetary policy. As the ECB's Vice-President, I will work closely with my colleagues in the Governing Council and the Executive Board to continue the ECB's successful track record. In this role, I would place great importance on safeguarding the ECB’s independence while fully honouring its accountability to the European Parliament.

Provided that our main objective is met, we should support wider policies that seek to enhance the EU's competitiveness and resilience. In particular, the current efforts to create the savings and investments union are highly appropriate, as their main goal is to significantly improve the availability of financing for innovative companies, an area in which the EU lags significantly behind its main global competitors. These efforts would also contribute to a smoother transmission of monetary policy in the euro area. From the perspective of the ECB, completing the banking union is equally important as it would further reduce the risk of negative feedback loops between banks and sovereigns which, as we have seen in the past, can seriously undermine the stability of the economic and monetary union. Moreover, the ECB will continue its efforts to build the resilience of the financial system against the effects of climate change. In the last two years, the ECB has made significant progress in this regard, as climate and nature-related risks have become embedded in regular activities in the ECB's three main areas of competence, namely monetary policy, financial stability and banking supervision. Finally, the ECB will directly contribute to the ongoing efforts to enhance Europe's resilience and strategic autonomy by developing the digital euro, which will be a major alternative to the foreign payment service providers that currently dominate the market.

However, we should be careful that initiatives to improve EU competitiveness do not come at the expense of financial stability. Specifically, a relaxation of prudential regulations would likely not lead to boosting banks' lending. The euro area bank lending survey shows that capital constraints are not a relevant factor for tightening bank lending in recent years, given that banks are well-capitalised. By contrast, banks’ risk tolerance, risk perceptions and competition were important determinants. Therefore, reducing capital requirements would just lead to higher leverage and less resilience, which is not justified if we want sound financial institutions that are able to fund the economy while remaining resilient to shocks.

4. You would be the first Central and Eastern European member of the ECB’s Executive Board. How do you assess this development, and what new perspectives or approaches do you believe this background may bring to the Board’s work?

I consider it important that the ECB’s Executive Board reflects the diversity of the Eurosystem - its competences, experiences, skills, geographical balance and gender. This diversity enriches the Board’s deliberations and strengthens the ECB’s legitimacy in the eyes of all Europeans.

Over the past two decades we have witnessed the expansion of the euro area towards the countries of the Central and Eastern Europe (CEE) (Slovenia 2007, Slovakia 2009, Estonia 2011, Latvia 2014, Lithuania 2015, Croatia 2023 and Bulgaria 2026), which now account for about 6.7% of euro area population and 3.6% of euro area GDP. Thus, I would say that it comes as no surprise that there is a political will to have someone from the smaller countries of the CEE region (that joined the euro area after 1999) on the Executive Board. I believe that the choice of a member from a smaller country from the CEE region amplifies the importance of having on board views and perspectives from a standpoint of a small open economy. CEE countries are sometimes seen as being on the periphery of European decision-making processes, with their interests sometimes not as fully represented in EU institutions. Having a member from CEE would likely help bridge this gap, building greater trust in the ECB’s policies within these countries. It could also help reinforce the credibility of the ECB in regions that might feel like their concerns are overlooked in broader euro area decisions.

As you are all aware, CEE region has its own unique economic context compared to Western Europe. For decades, many CEE countries have been undergoing transitions from centrally planned economies to market economies. The region has seen rapid growth in recent years, but still faces challenges like income disparities, varying levels of economic development, and distinct monetary and fiscal needs. Bringing a CEE perspective to the ECB would introduce a more nuanced understanding of economic growth dynamics in emerging economies.

In addition, having long worked in a “hostcountry” supervisory environment – a reality shared by many smaller euro area members – I would bring a practical understanding of how financial stability risks can build up in small, bankdominated systems, and how close cooperation between national and European authorities can mitigate them. This approach complements the perspectives of colleagues coming from larger, more marketbased financial systems.

More broadly, I am convinced that the presence of a Board member with long experience in Central and Eastern Europe can help strengthen trust in the ECB’s policies across the whole Union and demonstrate that all Member States – large or small, early or later joiners – are fully part of the euro area’s decisionmaking. It also sends a positive signal to countries on the path toward euro adoption that their perspectives are understood and taken seriously.

At the same time, I would not see myself as representing any specific region. Executive Board members must act in the interest of the euro area as a whole. My aim would be to contribute constructively to the Board’s collective work by bringing analytical rigour, openness to different viewpoints and a deep commitment to Europe’s shared institutions and values.

All in all, I think the addition of an Executive Board member from a CEE country could enrich the ECB’s work by providing a broader, more inclusive perspective on economic policy and regional challenges. This could lead to better-targeted policies that foster overall European stability and growth, while also considering the particularities of the diverse economies within the euro area.

B. ECB monetary policy and economic developments

5. The ECB has reaffirmed a symmetric definition of price stability over the medium-term. How should this commitment be implemented and assessed in practice when inflation deviates persistently from the medium-term target? What is your definition of the ‘medium-term’?

It is important to recognize that defining "price stability" is a core responsibility of the ECB. The 2003 ECB strategy review defined the inflation target as "below, but close to 2%" – a refinement of the original 1998 target of "below 2%". The subsequent strategy review, in 2021, was motivated by the persistent low-inflation environment and prompted another reformulation of the definition. Recognizing that the formulation "below, but close to 2%" might suggest that 2% is a ceiling and thereby risking de-anchoring of long-term inflation expectations downwards, the ECB redefined its price stability objective as a symmetric 2% inflation target over the medium term.

This new formulation is simple and easily communicated – the symmetry of the target conveys that negative and positive deviations from the target are equally undesirable. The most recent strategy assessment in 2025 confirmed this symmetric target while acknowledging an increasingly volatile environment ahead.

Any large and sustained deviation of inflation from the target in either direction must be addressed forcefully to prevent such deviations from becoming entrenched through de-anchored inflation expectations. Elevated inflation expectations in an inflationary environment act pro-cyclically creating additional inflationary pressures – lower real rates incentivize households to increase spending (decrease savings) and firms to invest more, workers to demand higher wages and, generally, firms to raise their prices. Consequently, a strong and front-loaded initial policy response and appropriate fine tuning after that is essential to prevent de-anchoring of inflation expectations and to mitigate possible second-round effects, thereby preserving the ECB's credibility.

The deliberate lack of a precise definition for "medium-term" – an important component of the price stability objective – reflects the ECB's preference to maintaining needed strategic flexibility.

Monetary policymaking operates under substantial and increasingly large uncertainty, and the appropriate policy response depends on the constellation of shocks driving the inflation deviation – whether shocks are local or common, demand or supply, permanent or transitory, and large or small. Policy transmission also involves significant and variable lags and uncertainties, making overly rigid definitions counterproductive. By emphasizing price stability over the medium-term without specifying exact timeframes, the ECB preserves the flexibility to tailor its response to prevailing conditions and avoid excessive policy-induced volatility in economic activity and inflation. However, this flexibility must not be misused or stretched excessively – any central bank behaviour that is perceived as abandoning the commitment to price stability could undermine the anchoring of inflation expectations.

Regarding the definition of “medium term”, it cannot be fixed in calendar time terms. It depends on the shock that the central bank is facing. An acceptable definition of the "medium-term" horizon would assume it to be short enough to coincide with the minimum time it takes for monetary policy to make a substantial impact on inflation. But it could be longer if the central bank is confronted with transitory supply-side disturbances, which are not likely to affect inflation expectations. In this case, the central bank can be more patient reacting even to inflationary shock in order not to create excessive volatility in growth and unemployment. As you see, the definition is necessarily context-dependent, which supports the case for the current flexible approach.

6. In your view, how should the ECB react to inflation surges stemming from supply shocks? What lessons do you draw from the ECB’s response to the inflation surge following the pandemic and the energy crisis? How will those lessons shape your approach going forward?

It is always important for a central bank to understand what type of shocks is driving inflation and to set an appropriate policy response accordingly.

Some shocks, such as energy shocks (often classified as "supply shocks"), are expected to have relatively short-lived effects on inflation. In such cases, and provided they are not expected to destabilise inflation expectations, it makes sense to "look through" these shocks. Monetary policy affects the economy with long and variable lags, so reacting strongly to temporary shocks is unwarranted – the shock's impact would fade before policy actions could influence inflation and output. Therefore, reacting forcefully to those transitory supply-side shocks would introduce unnecessary volatility in economic activity, harm growth excessively and also increase inflation volatility.

The job of a central banker would be straightforward if we knew what type of shock was hitting the economy or could anticipate future shocks – but these are, by definition, shocks and therefore surprises with often an uncertain transmission potential. So, real-time identification of shock types is often challenging. Moreover, even transitory supply shocks such as energy price shocks may hit the economy in waves. If elevated supply-driven inflation persists long enough, it can affect inflation expectations and trigger second-round effects, requiring a central bank response.

The relatively recent inflationary episode (the post-pandemic inflation surge) is a good example in this regard. Initially, the gradual rise in inflation was considered transitory, but the shocks proved more persistent and broad-based than expected. The supply-side inflation eventually created potential demand problems through the possibility of unleashing feedback loops in the

absence of a sufficiently forceful monetary policy response. Ultimately, forceful policy action was needed to return inflation to target and contain the risks of inflation expectations becoming unanchored on the upside. This experience illustrated the context-specific interpretation of the looking-through approach.

We now recognize that monetary policy operates in a more volatile world where supply shocks will probably be more frequent due to geopolitical fragmentation, climate change, and shifting supply chains. The traditional doctrine of "looking through" supply shocks must therefore be applied more cautiously.

In conclusion, if long-run inflation expectations remain anchored following supply shocks, looking through may remain viable. By contrast, if a supply shock or a series of them occur and trigger second-round effects or affect inflation expectations, a forceful response is warranted irrespective of shock type – particularly given the ECB's primary objective. It goes without saying that, to assess the nature of a shock and understand its propagation mechanism accurately, we must continuously update our forecasting and analytical frameworks.

7. In times of high public debt levels, the ECB could come under pressure to hold down interest rates or continue large bond purchases to help heavily indebted Member States. How do you approach such concerns about ‘fiscal dominance’?

The ECB's monetary policy is guided by its mandate of price stability, and independence from fiscal authorities is a core institutional feature designed to prevent situations where monetary policy becomes dictated by fiscal financing needs. Fiscal policy is the responsibility of Member States. Reacting directly to fiscal sustainability concerns would blur this institutional separation and risk undermining ECB independence. If the ECB were perceived as adjusting policy to accommodate highly indebted governments, this would weaken incentives for sound fiscal policies and reforms, potentially harm inflation expectations, and risk constraining monetary policy to government financing needs – precisely what central bank independence is designed to prevent. ECB communication has repeatedly emphasized that monetary policy cannot substitute for sustainable fiscal policy.

In certain circumstances, the ECB has introduced extraordinary instruments, including large-scale government bond purchases under various programs. Some observers interpreted these as reactions to government financing needs, but they were motivated by the need to preserve price stability and ensure smooth monetary policy transmission during periods of low inflation following the financial crisis or extraordinary shocks like the pandemic. In other words, the ECB responds to threats to its monetary policy goals and transmission, not to fiscal problems – even when those threats originate in sovereign bond markets. For instance, with the introduction of the Transmission Protection Mechanism (TPI) in 2022, the ECB clarified that it will not respond to government bond yield increases justified by macroeconomic fundamentals, but only to unwarranted, disorderly dynamics that threaten monetary policy transmission. TPI implementation will be subject to clearly defined criteria, including Member States' compliance with the EU fiscal framework.

In summary, the ECB's core mandate and institutional independence are specifically designed to guard against fiscal dominance and preserve monetary policy credibility, even during periods of elevated public debt.

8. If faced with a scenario where inflation falls persistently below target while financial stability risks rise, how would you propose navigating this policy trade-off?

The revised monetary policy strategy explicitly recognizes that financial stability is a precondition for price stability and establishes a clear conceptual framework for incorporating financial stability considerations into monetary policy deliberations. Safeguarding financial stability is therefore not a secondary objective but an integral element of achieving durable price stability. A resilient financial system enables an adequate transmission of monetary policy when needed, making financial stability not a constraint on price stability but a prerequisite for effective monetary policy. Possible trade-offs are thus best managed through a complementary use of macroprudential and monetary policy instruments rather than prioritizing one objective at the expense of the other.

In the scenario described, I would follow a "separation with coordination" principle: maintaining a clear sense of the distinct roles of each policy area while remaining strongly aware of how closely the two challenges are interconnected. On the monetary policy side, the starting point would be to remain firmly focused on the ECB's core mandate of delivering price stability over the medium term. Prolonged inflation below target is not benign – it risks weakening inflation expectations and making the target increasingly difficult to achieve. This would argue for pursuing monetary accommodation in a data-dependent and carefully calibrated manner. At the same time, such support should be clearly framed as conditional and proportionate to avoid any perception of open-ended easing that could fuel excessive risk-taking or inflate asset prices.

Meanwhile, macroprudential policy should carry the primary burden of addressing financial vulnerabilities. Rising financial stability risks should not automatically trigger a change in the monetary policy stance and overall financial conditions. Instead, they are better contained through timely implementation of targeted macroprudential and supervisory tools, combined and calibrated depending on the source and intensity of the risks. Early build-up of macroprudential space is particularly valuable. It strengthens banking resilience and preserves the bank-lending channel of the transmission mechanism, thereby preserving monetary policy's room for manoeuvre and allowing it to pursue price stability without being constrained by financial stability risks.

In addition, macroprudential policy is well suited to address nationally specific risk build-ups and to react appropriately at the national level when needed. From my perspective, to ensure these tools work in the desired direction, it is important to empower national authorities to implement them effectively, while the ECB supports this process through dialogue, coordination, and the exchange of best practices among countries. In this regard, it is important to continue the ECB's efforts to complete the macroprudential framework in the euro area, particularly to ensure more effective regulation and supervision of non-bank financial intermediaries.

Maintaining strong macroprudential vigilance is therefore critical. My home country, Croatia, is a relevant example: Croatia has been a pioneer among national central banks in introducing macroprudential measures, actively building up capital buffers and managing risks prudently.

These efforts have strengthened the resilience of its banking sector even in turbulent times. My personal involvement in these initiatives has provided me with practical insights into what makes macroprudential policies effective – from careful calibration and early action to clear communication and close coordination with monetary policy and other stakeholders.

It is also important to keep in mind that, in today's world, clear and consistent communication is essential. This helps explain the rationale behind each set of measures and underscores that policies are not working at cross-purposes. On the contrary, they are deliberately complementary: monetary policy stabilizes prices over the medium term, while macroprudential policy ensures that the financial system remains resilient enough to transmit monetary policy effectively and support sustainable economic growth. This complementarity is further reinforced by the fact that a robust financial sector allows monetary policy to pursue price stability persistently without compromising financial stability.

9. How do you assess the ECB’s communication strategy? Is there scope for further improvement, including the incorporation of more relevant financial and price stability indicators and enhanced scenario analysis in its monetary policy statements?

The ECB’s communication strategy has evolved significantly in recent years and, in my view, now rests on a much clearer and more transparent architecture. Since the strategy review, the monetary policy statement, press conference, Economic Bulletin and the monetary policy accounts together provide a coherent and layered communication framework. This has improved clarity for expert audiences while also making key messages more accessible to the wider public. I particularly value the efforts to simplify the monetary policy statement and to present a more structured narrative on the economic outlook, risks, and policy rationale. Also, the introduction of the simple price stability objective in the 2021-22 strategy review has contributed to improving communication. In the 2025 assessment of the monetary policy strategy, the ECB reconfirmed the importance of clear communication and stressed that it will continue to adapt its approach in response to the evolving communication landscape.

The environment in which monetary policy is conducted has become more uncertain, and this places a premium on clear, timely and consistent communication. Scenario and sensitivity analyses have therefore become increasingly important for explaining how the ECB responds to risks surrounding the baseline outlook. Highlighting these scenarios – especially when uncertainty is elevated – helps market participants and citizens better understand the conditionality of policy decisions and strengthens the ECB’s accountability. I believe that continuing to integrate scenario work into the monetary policy statement, when appropriate, can further support this objective.

There is also scope to continue refining the communication of indicators that matter for the Governing Council’s assessment, including those related to financial conditions, the transmission of monetary policy and the distribution of risks. In my view, giving these indicators a more explicit place in the regular communication package – without overwhelming the audience – would help explain how the Governing Council weighs incoming data and how uncertainty shapes its decisions. This would also reinforce the important link between transparency and credibility.

Finally, communication remains a twoway process. Listening carefully to stakeholders – including citizens, social partners and the European Parliament – can help the ECB adapt its messages and improve understanding of the monetary policy framework. Continued investment in simple, relatable and visual communication tools will be essential for maintaining trust and anchoring expectations. As the media landscape evolves, it is important to continue exploring options to improve communication, with special emphasis on the public at large, where further gains seem possible. If appointed, I would strongly support these efforts and remain committed to engaging openly and constructively in all accountability settings.

10. How do you evaluate the current set of monetary policy instruments at the ECB’s disposal, including non-standard measures introduced in recent years? In your view, how can the use of such instruments be embedded in a governance framework that safeguards accountability to democratic institutions without constraining the ECB’s capacity to act independently?

Next to the ECB policy rates, which is the primary monetary policy instrument to achieve price stability, the ECB has over time developed several other monetary policy instruments. These instruments serve one or both of the following purposes: to steer the monetary policy stance when the policy rates are close to the lower bound and/or to preserve the smooth functioning of monetary policy transmission. These instruments include longer-term refinancing operations, asset purchases, negative interest rates and forward guidance. Each of these instruments was designed to address specific circumstances where adjustments in interest rates in positive territory would have been insufficient to maintain price stability.

The use of these nonstandard measures has been reviewed carefully in the ECB’s recent strategy assessment, taking into account not only the lessons from the low-inflation period but also from the post-pandemic inflation surge. In my view, this assessment confirmed the importance of having a diverse and flexible toolkit. In case of large, sustained deviations of inflation from target, be it above or below the target, it is essential that appropriately forceful or persistent monetary policy action is taken to prevent de-anchoring of inflation expectations. While policy rates are the first line of response, at times other measures may need to be invoked to ensure price stability in the medium term. These instruments therefore should remain part of the ECB toolkit.

That said, the use of nonstandard measures must always be proportionate, given their potentially larger side effects compared with standard rate policy. This is why the ECB applies a comprehensive proportionality assessment, which implies assessing the benefits and the potential side effects of monetary policy measures, their interaction and their balance over time. I fully support this approach, as it safeguards the effectiveness of monetary policy while ensuring that tools are deployed in a measured and responsible manner.

Transparency and accountability are essential complements to this flexibility. The ECB has made significant efforts to explain the design and parameters of its programmes, publishing extensive analyses of their modalities and effectiveness, and ensuring public access to detailed information on its balance sheet. At the same time, some operational elements cannot be disclosed without undermining the effectiveness of the tools themselves. Maintaining this balance – between openness and protecting the integrity of monetary policy – is important. Ultimately, what matters most is that the ECB remains fully accountable to the European Parliament and the public at large, while preserving the independence needed to fulfil its mandate.

11. The ECB places increasing emphasis on communication as a policy tool. How much uncertainty should a central bank explicitly communicate without undermining credibility or accountability?

Uncertainty has been unusually elevated in recent years, reflecting the pandemic, the inflation surge and ongoing geopolitical tensions. The 2025 strategy assessment recognises that ongoing structural shifts related to geopolitics, digitalisation, artificial intelligence, demography, the threat to environmental sustainability and changes in the international financial system. These shifts suggest that the inflation environment will remain uncertain and potentially more volatile. This can result in larger target deviations in both directions, posing challenges for the conduct of monetary policy. In recognition of structurally elevated uncertainty, the ECB takes into account not only the most likely path for inflation and the economy but also surrounding risks and uncertainty, including through the appropriate use of scenario and sensitivity analyses.

This is also why the ECB has shifted towards a data-dependent and meeting-by-meeting approach to determining the appropriate monetary policy stance. Interest rate decisions are based in particular on the assessment of the inflation outlook and the risks surrounding it, in light of the incoming economic and financial data, as well as the dynamics of underlying inflation and the strength of monetary policy transmission.

In my view, communicating uncertainty explicitly is an essential part of modern central banking. Since both inflation persistence and the strength of monetary transmission are first order influences on the calibration of the rate path, the prominence given to these factors in ECB communication have helped market participants to understand our reaction function. As a result, the ECB’s credibility and effectiveness have not suffered from the uncertain environment.

Finally, communication of uncertainty is also integral to accountability. The ECB needs to communicate not only the outcome of its deliberations but also the factors it has taken into account coming to its decisions, including its risk assessment. Transparency and accountability therefore go together and reinforce each other.

12. Geopolitical and trade developments increasingly impact inflation dynamics. How should the ECB factor in these developments in its monetary policy decisions?

Geopolitical tensions and disruptions to international trade can be major sources of economic shocks and uncertainty, with considerable implications for the economy and price stability. For this reason, the ECB closely and continuously monitors global geopolitical developments, trade, and the channels through which they affect the euro area economy and inflation. Eurosystem staff projections incorporate the most likely path for the global economy based on well-defined assumptions, including marketbased expectations for interest rates and for energy prices such as oil and gas. Effective tariff rates in place at the time of the projection cutoff are also taken into account.

Given the complexity and unpredictability of today’s geopolitical environment, it is essential to also monitor and assess the uncertainty and risks surrounding the baseline projections that it induces. The ECB increasingly complements its baseline projections with risk assessments, sensitivity analyses and scenario analyses. For example, recent projection exercises have included dedicated assessments of the potential impact of shifts in US tariff policy and of heightened geopolitical tensions in the Middle East. These tools are essential for understanding not only the expected central path of the economy but also the range of plausible alternative outcomes – an important consideration for calibrating monetary policy in periods of elevated uncertainty.

Geopolitical and trade developments can also affect financial stability, including through commodity markets, global risk sentiment and crossborder financial flows. The ECB regularly evaluates these risks, including in its Financial Stability Review, to ensure that monetary policy decisions are informed by a broad assessment of the macrofinancial environment.

In my view, this combination of close monitoring, structured risk assessment and scenario analysis allows the ECB to factor geopolitical and trade developments into its monetary policy decisions in a transparent, consistent and forwardlooking manner. As uncertainty in the global economy may remain elevated for some time, maintaining this comprehensive approach will be crucial for safeguarding price stability in the euro area.

13. Climate change and nature related risks might have an impact on inflation dynamics and economic uncertainty. How do you assess the role currently assigned to those risks in the ECB's monetary policy analysis and decision making and how should the ECB incorporate them in its toolkit? Should the ECB review its price stability monitoring framework to better take into consideration these risks? How do you balance responses with the principle of ‘market neutrality’?

Climate change and nature degradation are shaping the economic environment in which monetary policy operates. More frequent and extreme climate events can result in a combination of supply and demand shocks, affecting output and increase inflation volatility and uncertainty. Over a longer horizon, increased physical risks may also have structural effects on long-run growth and long-run interest rates. In my view, the ECB has made important progress in incorporating these risks into its monetary policy analysis, but the evolving nature of climate change requires continued reviewing of this work.

Beyond monetary policy analysis, the ECB has also acted to incorporate these risks into our monetary policy implementation toolkit. The Eurosystem tilting framework played a meaningful part in mitigating risks and reducing emissions associated with corporate bond monetary policy portfolios. Since 2023, the ECB and Eurosystem NCBs publish annually climate-related financial disclosures on monetary and non-monetary policy portfolios which since the last edition incorporate a new indicator on nature-related dependencies. Interim decarbonisation targets were introduced in 2025 to monitor the emission reduction trajectory of corporate bond portfolios on a path that supports the goals of the Paris Agreement. More recently, the ECB decided to adapt its collateral framework by introducing a climate factor which will address forward-looking climate-related uncertainties, enhancing the resilience of monetary policy implementation. Finally, the design of the operational framework will aim at incorporating climate change-related considerations into the structural monetary policy operations.

While it is the primary responsibility of governments to take appropriate action for dealing with climate change, the ECB, within its mandate, takes into account the implications of climate change and nature degradation for monetary policy and central banking. Tools that the ECB uses in this context include a model-based approach to analysing the transmission of decarbonisation strategies, such as carbon taxes, the EU Emissions Trading System (EU ETS) and policy mix scenarios to inform the macroeconomic projections and employed as scenarios around the projection baseline. These efforts help ensure that monetary policy decisions are informed by a better understanding of how climate developments shape inflation dynamics and transmission. As climate shocks are likely to become more frequent, I believe it will remain important to reflect such risks in the scenario analyses.

As regards market neutrality, this is an operational tool rather than a legal requirement. Market neutrality can help ensure that the ECB’s interventions in the market comply with the open market economy principle. However, the ECB can justifiably depart from the market neutrality principle in order to achieve its objectives and comply with Treaty principles. The existence of climate externalities requires reconsidering the notion of market neutrality. This for instance has been the case when the ECB tilted purchases in the Corporate Sector Purchase Programme towards issuers with a better climate performance.

14. What are your views on the current level of coordination between the main central banks on international level? How do you see attacks on central bank independence in third countries changing this?

The major central banks cooperate today within a dense and welltested network of international fora, ranging from the Bank for International Settlements, the Financial Stability Board and the IMF, to more specialised groups focusing on payments, financial stability and regulatory standards. This cooperation has repeatedly proven its value during periods of global stress, as we saw during the global financial crisis, and, more recently, the pandemic and the energy price shock following Russia’s invasion of Ukraine. While each central bank ultimately takes decisions in line with its domestic mandate and institutional framework, there is a common understanding that transparent communication, regular exchange, sharing of analysis and – where appropriate – joint policy actions can help avoid negative spillovers and contribute to global monetary and financial stability.

Attacks on central bank independence in third countries are therefore a cause for concern. When monetary policy becomes subject to shortterm political pressures – whether to accommodate fiscal needs or to keep interest rates artificially low – credibility suffers, inflation expectations risk becoming unanchored, and financial markets may demand a higher risk premium.

In this environment, the response, in my view, must be to reaffirm and exemplify the benefits of independent central banks. In this respect, I fully support the joint statement issued by ECB President Lagarde, on behalf of the Governing Council, and other international central bankers on 13 January 2026. At the same time, the ECB has a strong interest to uphold institutions and fora that promote macroeconomic and financial stability and needs to play its part to keep them well-functioning and strong. Maintaining steady and constructive working relationships with all central bank counterparts remains essential to preserving a stable global financial system – even in an environment where political pressures may differ across jurisdictions.

15. The ECB’s collateral framework does not rely mechanically on external credit ratings and involves a significant degree of internal judgement. How should accountability for these risk-management choices be ensured, particularly in light of their potential economic, distributional and political consequences?

Collateral requirements are an important pillar of any of the ECB’s credit operations to protect the ECB from the financial risk associated with these operations. Article 18.1 of the ESCB and ECB Statute mandates that lending to banks through refinancing operations can only be provided against adequate collateral. To ensure that collateral is adequate, the Eurosystem applies eligibility criteria that include a well-established credit assessment framework, which draws on multiple sources of information and incorporates internal judgment, which is essential as mechanical reliance on external credit ratings – especially for sovereign bonds – can jeopardise the smooth implementation of monetary policy and risk triggering sharp “cliff effects”.

In practice, Governing Council discretion can apply after a deep weighing of trade-offs between policy (e.g. ensuring collateral sufficiency in accordance with prevailing monetary policy stance) and risk management considerations.

As part of the ECB measures related to the Global Financial Crisis, the subsequent euro area sovereign crisis and more recently the pandemic crisis, temporary discretionary measures in the form of country-specific waivers were introduced. They were linked to the existence of a financial assistance programme entailing conditionality, among other things, on the achievement of fiscal targets, and also linked to market functioning and risk management considerations. At the same time, when the continued acceptance of certain sovereign bonds was considered to violate its statutory obligation to accept only adequate collateral, those assets were no longer accepted.

For each temporary deviation, the ECB was transparent and explained its decisions to EU citizens and their elected representatives, the Members of the European Parliament, in line with the accountability architecture. Moreover, given the key role of sovereign ratings in the financial system and in its collateral framework, the Eurosystem regularly conducts in-depth due diligence of all ratings provided by accepted rating agencies.

In my view, the current framework strikes a good balance: it ensures robust risk management while allowing the ECB sufficient flexibility to safeguard monetary policy transmission in exceptional situations.

16. The ECB has emphasised a ‘meeting-by-meeting’ approach to monetary policy decisions. What are your views on the usefulness of forward guidance as a monetary policy tool?

As monetary policy operates in an increasingly uncertain and changing economic environment, the way we communicate our current and future actions is also being adapted accordingly. The European Central Bank introduced forward guidance in 2013, amid a low-inflation (and near-zero policy rate) environment, as a tool to signal that rates would stay low for an extended period to support growth and inflation. When one-sided, persistent shocks push the economy toward the effective lower bound, forward guidance can indeed reinforce confidence that policy will remain sufficiently accommodative to offset these pressures. But the effectiveness of forward guidance diminishes when the central bank faces two-sided risks and uncertainty about the persistence of inflationary shocks is elevated, as the probability of a delayed policy lift-off can rise quickly under such conditions. In the latter environment such precommitment can be overly constraining for the central bank and therefore prove counterproductive. In such an environment, central banks need the flexibility to act based on available data, taking into account a fast-changing environment and adopting a meeting-by-meeting approach.

The inflation surge demonstrated that forecasting inflation during periods of large and numerous shocks is inherently difficult. A case in point is the immediate post-Covid phase. As forecast errors widened and heightened uncertainty prompted frequent revisions of the outlook, the ECB adopted a "meeting-by-meeting" approach in July 2022, emphasising the role of incoming data in informing monetary policy decisions. Importantly, this framework does not imply a backward-looking orientation; the focus remains firmly on the medium term. Nor should data dependence be confused with data-point dependence, given that the underlying state of the economy reflects the interplay of numerous factors. Although rate forward guidance was suspended during this period owing to rapidly changing circumstances and exceptional uncertainty, the ECB continued to provide transparency regarding its decision-making process. In March 2023, it clarified its reaction function through a three-element framework: the inflation outlook, the dynamics of underlying inflation, and the strength of monetary policy transmission. Following the 2025 strategy assessment, risks surrounding the outlook were formally incorporated to underscore the role of uncertainty in policy formulation. The meeting-by-meeting, data-dependent approach has served us well in bringing inflation back to target by allowing us to react quickly to a fast-changing environment and maintain full optionality in our decisions on rate changes.

To conclude, the selection, design, and deployment of policy instruments should account for continuously evolving macroeconomic conditions while preserving the flexibility needed to respond promptly to new shocks.

17. Given persistent cross-country differences in inflation dynamics within the euro area, how should the ECB interpret inflation dispersion when calibrating policy, and do you see future euro area enlargement as adding meaningful complexity to maintaining a coherent single monetary stance?

The European Central Bank's monetary policy is focused on the euro area as a whole, rather than individual member states. This area-wide orientation reflects both the institutional framework of the monetary union and the practical constraints of operating a single monetary policy across diverse economies. Some degree of heterogeneity across countries is therefore not only inevitable but also acceptable within this framework, particularly when they arise from convergence dynamics within the union. Importantly, the evidence does not suggest that cross-country heterogeneity of inflation or business cycle fluctuations dynamics has reached levels that would make the common currency unsuitable for any member state, or that would generate fundamental tensions among countries regarding the appropriate stance of monetary policy.

Regarding the relevance of asymmetric shocks associated with euro area enlargement, internal analyses conducted by the HNB indicate that new member states have generally been well integrated into the euro area economy prior to adoption, with business cycles that are closely aligned with those of existing euro area members. Furthermore, monetary policy and exchange rate arrangements prior to euro adoption, such as currency board regimes or tightly managed floats, further emphasize that new entrants are natural members of the single currency area. For these newer members, the relative importance of symmetric euro area-wide shocks, which should align business cycles and inflation developments across countries, is substantial, increasing over time, and broadly comparable to that observed in other small member states. This pattern is consistent with the endogeneity hypothesis of Optimum Currency Area theory, which posits that relative importance of symmetric shocks may increase after a country adopts the common currency. The underlying mechanism is that monetary integration tends to enhance trade linkages and promote cross-border investment flows, thereby deepening economic links over time. It is also worth noting that recent new members, including Bulgaria and Croatia as most recent members, are relatively small economies with limited influence on the area-wide aggregates that guide monetary policy decisions.

Notwithstanding these general developments, inflation differentials across euro area countries have exhibited some notable variation in recent years. These differentials were particularly pronounced at the peak of the recent inflationary episode, driven primarily by divergences in energy, but also food and services inflation. More recently, however, these differentials have largely normalised, suggesting that much of the observed divergence was cyclical in nature and that business cycle coherence remains important factor in determining inflation outcomes across the area. Cyclical economic performance also plays a role: Croatia, Slovakia or Spain, for example, have recorded above-average inflation alongside above-average GDP growth over the recent period. Current inflation differentials remain somewhat above historical averages, suggesting that some structural differences across countries may also have a role – for example, differences in labour market conditions, varying degrees of exposure to Russian energy supplies (as observed in the Baltic states, for instance) or differences in sectoral composition across economies.

Inflation differentials are not inherently problematic within a monetary union, provided they remain moderate in magnitude. Indeed, such differentials are to be expected when they arise from temporary adjustments to economic shocks or from the natural process of real convergence across member states. However, large and persistent divergences in inflation would be a concern, as they may impede the uniform transmission of monetary policy across the area. A substantial fiscal expansion in a particular country, for example, could generate domestic price pressures that the single monetary policy cannot directly address. Similarly, sustained differences in underlying cost dynamics or the presence of structural rigidities may give rise to more persistent divergences in inflation trajectories.

For these reasons, inflation differentials warrant ongoing monitoring and analysis. Nevertheless, it must be acknowledged that the scope for monetary policy to directly address cross-country inflation divergences remains limited. The primary responsibility for managing country-specific developments rests with country policies, which must complement the area-wide orientation of the ECB's monetary policy stance.

18. Europe faces structurally weak productivity growth. How can the ECB contribute to a macroeconomic environment supportive of investment and capital formation without overstepping its mandate?

The ECB’s primary objective is price stability in the euro area. Stable prices are a prerequisite for economic and financial stability, which in turn are essential for an environment conducive to long-term investment and economic prosperity.

High inflation erodes wealth, labour income and the real return on capital, thereby discouraging consumption and investment spending by households and firms. Too-low inflation, on the other hand, can be a sign of a sluggish economy and thereby also harm investment incentives. Price stability reduces this uncertainty about future purchasing power, helping firms and households to take longer-horizon decisions on investment and consumption. Stable prices also support an efficient allocation of resources by allowing relative price signals to operate more clearly and by preventing the distortions associated with high or volatile inflation.

Without prejudice to its price stability objective, the ECB shall support the general economic policies in the European Union with a view to contributing to the achievement of the Union’s objectives as laid down in Article 3 of the Treaty on the Functioning of the European Union. Within its mandate, the ECB can thus support EU initiatives aimed at fostering investment, for instance by sharing its expertise on financial markets and their integration. The ECB does so regularly in its publications, and in meetings with other European institutions and Member States in the context of the EU fora.

The ECB also closely monitors productivity developments in the context of its economic analysis. This is particularly important at the current juncture since recent technological advances related to digitalisation and artificial intelligence have the potential to support productivity and increase the importance of intangible capital – as well as high-skilled labour and associated wages – relative to tangible capital.

C. Financial stability and supervision

19. What do you find the most important challenges in the field of financial stability in the euro area? How could the ECB support more effectively the fight against these challenges?

Financial stability risks in the euro area today stem from the combination of high uncertainty and underlying structural vulnerabilities.

First, geopolitical tensions and growing geoeconomic fragmentation are the key sources of risk, as they can weigh on future growth, increase market volatility and tighten financing conditions.

Second, fiscal challenges in some Member States remain key concern. Elevated debt levels, anticipated increases in defence, infrastructure, and social spending, coupled with limited fiscal space, could test investor confidence and exert upward pressure on sovereign funding costs. Given the strong links between sovereigns, banks, and the real economy, these vulnerabilities could generate adverse feedback loops if triggered simultaneously.

Third, financial markets are vulnerable to sharp corrections. Despite elevated geopolitical and policy uncertainty, risk appetite has remained strong and asset valuations (especially in equity

markets) look stretched and increasingly concentrated, particularly around AI-related firms. This creates the risk of sudden market corrections, which could be amplified by the NBFI sector given their liquidity mismatches and leverage. Developments in the US private credit market and the highly capital-intensive nature of the AI boom also point to risks related to opacity, weakening underwriting standards, and tighter links between banks and non-banks. If AIrelated expectations were to disappoint, a sharp correction in US markets could spill over to the euro area through cross-border exposures, market channels, and bank–NBFI linkages. To meet margin calls or maintain liquidity, NBFIs with significant US market exposures may draw on bank-provided credit lines or liquidate assets, putting stress on banks’ balance sheets through increased credit risk, higher funding demand, and potential mark-to-market losses. In addition, credit spreads remain compressed, reflecting still low risk premia on both sovereign and corporate debt, which could amplify vulnerabilities in highly indebted economies or sectors if market conditions shift.

On top of cyclical risks, several structural challenges for financial stability include cyber risks, climate-related physical and transition risks, demographic pressures and implications of digitalisation and technological innovations, such as AI.

The ECB can address these challenges most effectively by strengthening resilience of the financial sector through its analytical, supervisory and macroprudential roles. ECB provides comprehensive risk analysis, producing timely assessments of risks and vulnerabilities that contribute to appropriate policy decisions. This involves closely monitoring risks in banking and beyond the banking sector and, within its mandate, activating supervisory measures and, when warranted, reinforcing national macroprudential measures to enhance the resilience of the euro area financial system in an increasingly uncertain global environment.

Close cooperation with other authorities, both at the EU and Member States level, is essential to ensure that emerging systemic risks are identified at an early stage and effectively mitigated, for example by the timely build up adequate buffers to absorb potential shocks. In this context, the European Systemic Risk Board (ESRB) plays a central role as the EU-wide platform that brings together all Member States and the European Supervisory Authorities (ESAs), to facilitate information sharing, risk assessment, and coordinated macroprudential responses. Through its active involvement in the ESRB, the ECB can further strengthen cooperation and coordination among authorities, promote the exchange of best practices and lessons learned, and help ensure that macroprudential instruments are applied in a timely, consistent, and effective manner across the European Union.

Finally, clear and consistent communication is equally important to reduce uncertainty, anchor market expectations and to explain the rationale behind policy actions. By providing opinions and recommendations on regulatory changes, the ECB helps to shape a framework that addresses structural vulnerabilities and reinforces financial stability across the euro area.

The key priority is thus to remain forward-looking. Because financial stability risks often emerge from complex interaction of structural weaknesses and cyclical shocks, the ECB's role is not only to react to stress but to build resilience in advance, ensuring that the euro area financial system continues to support sustainable growth in a highly uncertain global environment.

20. How do you see the priorities of the ECB in the implementation of the recommendations from the Draghi and Letta reports, including on Savings and Investments Union (SIU)? How can the ECB, within its mandate, actively support the development of a genuine SIU?

The Draghi and Letta reports offer milestone contributions to the European debate on deepening economic and financial integration in the EU and promoting financial stability, growth, competitiveness and resilience. While their scope is much broader, the reports include key recommendations also on banking and financial issues, namely the Banking Union and the Capital Markets Union, summarised under the header of Savings and Investments Union (SIU).

In my view, a fullyfledged SIU is urgently needed. Europe's competitiveness, its open strategic autonomy, and its ability to finance the green and digital transitions all depend on a deeper and better integrated capital market. Despite nearly a decade of discussion since the Commission’s first Capital Markets Union Action Plan in 2015, progress has been slow. The rapidly evolving geopolitical environment has only increased the urgency of mobilising European savings toward productive investments and reducing Europe’s structural reliance on nonEU financial infrastructures. From this perspective, the Commission’s recent initiatives - on securitisation, the Savings and Investment Accounts, supplementary pensions, and capital market integration and supervision – are very welcome.

The ECB has a strong interest – and an important role to play – in advancing the SIU: first, monetary policy transmission will benefit from a deeper integration of capital markets; second, the tasks of the ECB in ensuring a smooth functioning of the payment system and financial market infrastructure will benefit from the improvements that the Commission proposals will bring in these areas; third, ECB bank supervision functions will benefit from a stronger and more integrated supervisory architecture for capital markets, also in light of the strong interconnections between banks and capital market players.

Overall, I believe the ECB should remain an active and constructive contributor to the development of the SIU. Within its mandate, it can actively contribute to the discussions based on its competences and its technical expertise, with a view to support the technical work and the achievement of tangible progress as soon as possible. The ECB should in particular provide its expertise as regards the integration of EU’s post-trading infrastructures and the creation of an EU integrated system of capital markets supervision, having benefited from the experience of the SSM.

21. What are your views on the completion of the Banking Union and the need for structural reforms?

The most important step to strengthen the competitiveness and resilience of the European banking sector is to allow European banks to fully reap the benefits of our single market. Completing the Banking Union is therefore essential. A complete Banking Union would also increase resilience and help safeguard against geopolitical shocks, market fragmentation, and other threats to financial stability, while also thereby strengthening confidence in the euro area financial system as a whole.

Born out of the lessons of the Global Financial Crisis and the following European debt crisis, the Banking Union was envisaged with three pillars: common supervision, common resolution and a common deposit insurance scheme. The first two pillars were introduced in record time with the creation of the Single Supervisory Mechanism and the Single Resolution Mechanism. I would describe them as success stories, which were instrumental in keeping our financial system stable during more recent crisis episodes like the 2023 banking turmoil.

However, progress on the third pillar, a European deposit insurance Scheme (EDIS), has been stalled for over a decade. In my view, this gap should be addressed promptly, as it would help a truly single banking market in Europe. EDIS is of the essence to ensure that one euro deposited at a bank in a Member States enjoys the same level of actual protection as one euro deposited at a bank in another Member State. Despite the harmonisation of coverage level and rules for national Deposit Guarantee Schemes (DGSs), the actual and perceived protection of deposits is still linked to the fiscal strength of the Member State.

Available DGS resources are a small fraction of insured deposits in a banking system and may be exhausted quickly. EDIS would allow to pool resources at the European level, reducing the risk that funds are not available when needed. EDIS would also contribute to mitigate the bank-sovereign nexus, by avoiding the risk of a national DGS having to turn to its Member State. As shown by ECB staff analysis in 2018, EDIS will bring these benefits without any substantial risk of systematic unwarranted cross-subsidisation across Member States, meaning there is limited risk that some countries end up paying the bill for banking crises in other countries in the Banking Union.

The agreement reached in 2025 by co-legislators on the reform of the Crisis Management and Deposit Insurance framework (CMDI) is a welcome step, particularly for improving management of crises of small and medium-sized banks, but this reform does not take away the urgency of completing the Banking Union with the introduction of an EDIS. Therefore, we need to reach a consensus on the timing and conditions for EDIS, and put its legislative proposal on the fast track.

Further elements are also needed to reinforce credibility of the bank resolution framework. Two key backstops remain missing: a common backstop to the Single Resolution Fund and an effective and sufficiently large public liquidity backstop for banks in resolution. I hope that progress on these backstops may be achieved soon.

Beyond the Banking Union, fostering a single market for banking would help support the competitiveness of our financial system, and I look forward to the Commission’s efforts to this end. The Single Market is a crucial lever that the EU has at its disposal.

22. What priorities would you set in addressing long-term structural risks (such as demographic ageing, climate transition and digitalisation) that impact price dynamics and financial stability?

Ongoing structural changes related to demographics, climate change, digitalisation and geopolitics contribute to an uncertain and potentially more volatile inflation environment. They could also affect the inflation trend, price formation and the relative prices of different products. In the real economy, it is too early to say whether, on balance, those structural changes will affect productivity positively or negatively. In my view, these developments must systematically be taken into account by monetary policy. Strengthening the ECB’s analytical capacity in these areas is therefore essential.

From a financial stability perspective, the ECB’s latest Financial Stability Review (November 2025) highlights three main vulnerabilities, which are also influenced by structural changes and the uncertainty over geoeconomic trends and tariff impacts: high asset valuations carrying the risk of sharp and correlated adjustments, fiscal challenges, possibly testing investors’ confidence, and banks’ exposures to tariff-sensitive sectors and their growing links to non-bank sector.

In this evolving environment, deepening the Single Market via the Savings and Investments Union, thereby advancing capital market integration, is key for European competitiveness. Anchoring our monetary sovereignty by preserving the role of the euro in the digital age will also be essential. Therefore, introducing a digital euro and the ECB’s work to enable settling distributed ledger technology (DLT) transactions using central bank money via a dual track-approach (Pontes and Appia) are key policy priorities. Taken together, these European initiatives have the potential to strengthen the competitiveness and resilience of the euro area, in particular by reducing regulatory fragmentation, unlocking venture capital and enhancing strategic autonomy.

In addition, sound structural policies are needed to boost innovation and productivity. In particular, regulatory simplification and improved conditions for start-ups could act as a catalyst for business dynamism. Strengthened education and training policies, along with increased work incentives, would help to make euro area labour markets fit for the age of Artificial Intelligence.

23. How do you assess the dependencies of the European financial system on non-EU digital service providers and how does the ECB intend to address such dependencies?

The European financial system relies on non-EU digital service providers in several areas, including cloud services, operating systems, or common infrastructures. The EU took a major step forward with the entry into force of the Digital Operational Resilience Act (DORA), which will strengthen the digital resilience of financial entities, by ensuring that they can withstand, respond to, and recover from ICT (Information and Communication Technology) disruptions, such as cyberattacks or system failures, but also including third-party risk management.

From a financial stability perspective, the ECB pays close attention to risks stemming from these dependencies. Cyber risks, in particular, have grown significantly, affecting not only banks but also insurers, pension funds and market infrastructures, driven by geopolitical tensions and growing digital interdependencies. The increasing use of AI may amplify these risks further, also depending on supplier concentration and technological penetration, given the potential for more sophisticated cyberattacks. These concerns were highlighted in the ECB’s latest Financial Stability Review and underline the importance of strong oversight through DORA.

The ECB also addresses these dependencies through its oversight of financial entities. The Eurosystem oversees different types of financial market infrastructures and other entities, as well as electronic payment instruments, schemes and arrangements, to promote the safety and efficiency of payment, clearing and settlement systems. These oversight responsibilities also entail managing risks and ensuring resilience as regards such dependencies. Moreover, on the banking supervision side, strengthening banks’ operational resilience is one of the two key Supervisory Priorities for 2026-28, and the ECB does report on these specific dependencies.

More broadly, Europe’s payment ecosystem still relies heavily on non-EU providers, especially in retail payments. The ECB's 2025 report on card schemes and processors highlights the heavy reliance on international card schemes while none of the processors operating across EU borders can be identified as fully EU-owned. In addition, there is no home-grown electronic payment solution covering the whole euro area. This is why the Eurosystem's retail payments strategy, last updated in November 2023, aims to foster the development of EU-governed pan-European solution for point-of-interaction payments, i.e. at the physical point of sale and in e-commerce. This is complementary to the digital euro project, which will rely on European infrastructure. This would allow Europe to regain ownership of the rails on which its payment system runs and thereby strengthen our autonomy.

In my view, the ECB should continue to strengthen its analytical, supervisory and oversight tools to address the risks associated with technological dependencies, working closely with EU legislators and national authorities.

24. What are your views regarding the simplification agenda in general, and the recommendations of the ECB High Level Task Force (HLTF) for simplifying the European prudential regulatory, supervisory and reporting framework, while fully preserving financial stability and prudential standards? How do you plan to follow-up on those HLTF recommendations?

The simplification discourse is both timely and necessary. The European prudential and supervisory framework has been developed drawing major lessons from the Great Financial Crisis and the European debt crisis. It served us well and helped strengthen financial stability. At the same time, it became increasingly complex over the past decade and contains some duplication and unnecessary burdens. I therefore welcome the work of the ECB High Level Task Force (HLTF) as an important contribution to identifying where simplification is possible without diluting prudential standards or weakening the resilience of the banking system.

I subscribe to the HLTF recommendations and key principles, which are:

Resilience should be maintained – this is crucial, as only a resilient financial system is able to serve the European economy. Hence, simplification is not deregulation. Importantly, our current capital requirements do not constrain private funding. Looking at the bank lending survey, balance sheet constraints have been negligible in determining changes in credit standards in 2024 and 2025. Instead, banks’ risk perceptions and their risk tolerance have been key drivers for credit standards. A stable and well-functioning banking system provides a strong foundation for economic growth. Resilient banks have a stronger capacity to lend and thus to support the real economy. Well-regulated and appropriately supervised banks can perform their roles without taking undue risks or threatening financial stability, ensuring the sustainable provision of financing. Well-capitalised banks are better able to absorb losses while continuing to lend to the real sector during economic downturns, reducing the risk of a systemic banking crisis, which would present severe consequences for the real economy.

Effectiveness in meeting prudential objectives needs to be maintained – microprudential, macroprudential and resolution authorities have to be able to effectively deliver on their mandates, capturing all relevant dimensions of risk.

European harmonisation and financial integration should be fostered – a European perspective and harmonisation across Member States will help us where a lack of harmonisation is a source of complexity or inconsistency. Being able to reap the benefits of a truly Single Market is key for banks' competitiveness.

International cooperation should be upheld – notably, being faithful to the Basel standards was rightly a red line for the Governing Council in the HLTF report. International standards and multilateral cooperation are crucial for a stable global financial system.

The ECB High Level Task Force delivered its report to the Commission in December. It is now up to the Commission to consider it as input for its own report on the banking system in the Single Market. The ECB flagged it stands happily ready to provide more detail to the Commission colleagues and the co-legislators. I consider it important to maintain this availability and, if appointed, I would proactively engage with co-legislators, including with this Committee, as also the current Vice-President did, when explaining the conclusions of the HLTF report to you.

25. The ECB HLTF report on simplification recommends a greater reliance on directly applicable regulations, with a view to reducing heterogeneity in national transposition and strengthening supervisory convergence across the Union. How would you cooperate with EU legislators and national competent authorities to ensure that this shift does not undermine local flexibility and the principle of proportionality, including in areas where key supervisory powers remain governed by national law? Which national specificities should, in your view, be explicitly safeguarded in the design of future EU regulatory frameworks?

The HLTF’s recommendation to shift EU prudential legislation from directives toward directly applicable regulations is, in my view, wellmotivated. Relying too heavily on directives can create heterogeneity in the applicable law and disparities in how institutions are supervised across the EU. The need to transpose directives into national law can lead to heterogeneity in how the law concretely applies. This can complicate cross-border banking. By contrast, directly applicable regulations do prevent such heterogeneous transposition into national law and facilitate uniform supervision, because they form a harmonised legal basis for supervisory guidance and expectations. This notably benefits banks that operate across jurisdictions and their investors, helps them reap the benefits of a truly single market, and facilitates broader economic growth, benefitting the entire EU.

This recommendation is in line with the principle of the HLTF to foster European harmonisation and financial integration. Relative to other jurisdictions, the EU faces a competitive disadvantage owing to the lack of scale that results from a still incomplete single market in banking. Banks face obstacles with regard to market integration and cross-border consolidation, and the share of European banks that are active on a European scale remains low. This also hampers EU competitiveness in a digitalised world, as it results in unexploited potential in terms of economies of scale and cross-border business. Breaking down national barriers would simplify business within the EU and foster growth, benefitting EU citizens at large.

At the same time, greater reliance on regulations must not come at the expense of national specificities where they remain relevant. Close cooperation between EU legislators, the ECB and national competent authorities (NCAs) is essential. It is important to have robust and transparent consultations with national authorities and stakeholders during the drafting of new regulations. This would ensure that national practical implementation challenges are considered at an early stage. In order to address unintended consequences, regular feedback loops between the ECB, the European Commission and NCAs are necessary, to monitor and assess the impact of directly applicable regulations. This will help us to reduce national barriers and foster European competitiveness and growth, while accounting for national needs as well.

Overall, I believe that shifting toward directly applicable regulations – accompanied by structured cooperation and careful safeguards for proportionality – offers a powerful way to strengthen supervisory convergence, reduce fragmentation and enhance the competitiveness of the European banking sector. If appointed, I would actively support this process and work closely with EU colegislators and NCAs to ensure that the transition delivers its intended benefits.

26. What are your views on the current regulation of non-banking financial institutions (NBFIs) and how should it be reformed?

Size and importance of the nonbank financial sector in the euro area have increased substantially over the past decade. Total assets of euro area non-bank financial institutions have more than doubled since 2009, and they now provide around 30% of debt financing to non-financial corporations (NFCs). This diversification of financing sources brings benefits to the real economy, but the growing interconnectedness between NBFIs, banks and global markets has also created new vulnerabilities that require a stronger and more coherent regulatory framework. In my view, addressing these vulnerabilities, notably via a more robust macroprudential approach, must be a priority if we are to preserve financial stability in an increasingly marketbased financial system.

Liquidity and leverage vulnerabilities remain elevated in the non-bank financial sector, increasing the likelihood of amplifying potential shocks. NBFIs remain vulnerable to asset price corrections, and stress in the NBFI sector may spill over to banks through funding linkages and derivative exposures. The investment fund sector faces vulnerabilities from liquidity mismatches and pockets of significant leverage. Combined with insufficient liquidity preparedness for spikes in margin calls, these factors can trigger procyclical behaviour. As for private credit markets in the euro area, they are characterised by limited transparency. Its rapid growth, complex and nontransparent structures, and strong crossborder linkages heighten the potential for hidden vulnerabilities, underscoring the need for international efforts to close data gaps and enhance risk monitoring.

An important lesson from past episodes of market stress is the need to enhance the policy framework for non-banks to ensure their resilience. The existing framework is predominantly microprudential and focused on investor protection, and it needs to be complemented by a more robust macroprudential approach.

Internationally agreed reforms to NBFI should be implemented in the EU fully and without delay. This includes measures agreed by the Financial Stability Board to address liquidity mismatches in money market and open-ended funds, improve liquidity preparedness for margin and collateral calls, mitigate systemic risk from NBFl leverage, and BCBS guidelines on counterparty credit risk management.

As the NBFI sector grows, and the EU takes steps to further integrate capital markets, we need more integrated EU-level supervision of funds and asset managers. This should be accompanied by a review of the EU macroprudential framework for the funds sector, enabling sector-wide monitoring, forward-looking risk assessments and, where necessary, the activation of preventive measures. To this end it will be important to strengthen ESMA’s role, by conferring macroprudential functions on it.

As reforms will take time to be agreed and implemented, supervisory authorities should proactively strengthen the resilience of non-bank financial institutions, making full use of their existing mandates and the current regulatory framework.

D. Payments and digitalisation

27. How do you assess the interactions between payment systems and monetary policy?

Emerging technologies such as DLT, tokenised assets and new settlement architectures are reshaping the interaction between payment systems and monetary policy, creating both opportunities and challenges for central banks. Combined with regulatory developments such as MiCAR and the EU DLT Pilot Regime, they can foster efficient and integrated digital capital markets in Europe. At the same time, they may affect the transmission of monetary policy by changing how liquidity circulates, how quickly positions are margined and settled, and which settlement assets dominate in key market segments. In my view, the ECB should actively enable innovation in payments and settlement while ensuring that these changes preserve the primacy of central bank money as the riskfree anchor of the system.

Stablecoins illustrate both the opportunities and risks inherent in this transformation. They aim to have a stable value, potentially – depending on their design and the soundness of the issuer – rendering them a convenient form of settlement asset. Today, crypto trading constitutes by far the most important use case for stablecoins and other use cases play a minor role, which helps contain shortterm risks. However, their rapid growth justifies close monitoring. A broader use of stablecoins in the future, especially if not denominated in euro, could weaken the role of central bank money as anchor of the monetary system, potentially compromising its ability to control the unit of account. If widespread use of stablecoins were to significantly increase, this could reduce retail deposits in commercial banks, banks' liquidity risk and their role in credit intermediation could be affected. Banks play a fundamental role in financing the euro area economy.

It is of crucial importance to maintain the two-tier monetary system without disrupting monetary policy implementation or transmission. This would ensure that banks are not disintermediated, maintaining their crucial role in financing the euro area economy and facilitating the transmission of monetary policy. Tokenised deposits are a way to reap the benefits of tokenisation while avoiding bank disintermediation and remaining within the well-regulated perimeter of the banking system. But for tokenised deposits they need to be transferable across banks.

Providing tokenised central bank money can enable this and will also be instrumental to supporting an integrated European market for digital assets. It will allow us to reap the benefits of the technology behind tokenisation, like reduced reconciliation costs, shorter settlement chains, atomic delivery-versus-payment and near-continuous trading and settlement. And it will be the trusted anchor of our – partially digital – monetary system of the future, serving as common, risk-free settlement asset, and hence as the backbone of our economy. It will also allow us to build on European infrastructures, euro settlement and EU-wide rules. The rapid evolution of technologies requires central banks to adapt their policy frameworks and regulatory approaches. Policymakers must balance support for innovation in payment systems with safeguards for monetary and financial stability.

28. Do you see risks to monetary stability related to the development of digital assets and which role should the ECB play in this context?

As I remarked in the answer to the previous question, the cryptoasset market has expanded significantly in recent years, reaching several trillion euros in value. Different crypto-assets present different characteristics and risks, whether it is unbacked crypto-assets such as Bitcoin, or stablecoins such as Tether which aims at maintaining a one-to-one peg with the US dollar. The risks from crypto-assets appear contained for now, but rising interconnectedness with the traditional financial system warrant attention, as they can lead to contagion risks.

Among digital assets, the rise of stablecoins has received particular prominence. While their use in the euro area remains limited and circumscribed to activities related to the trading of crypto-assets, an increased use of stablecoins can lead to a reduction in banks’ retail deposits. This will alter banks’ funding costs, liquidity risks and their intermediation role and consequently impact monetary policy transmission. In my view, these developments underline the need for the ECB to continue to take a proactive and forwardlooking stance.

The EU established MiCAR to enable the safe development of this market, in a way that safeguards monetary sovereignty, financial stability and the smooth operation of payments. The ECB was granted some responsibilities in these regards, by MiCAR, and it will be important that it continues to fulfil them alongside the national competent authorities.

Digital finance entails opportunities and Europe needs to be open and constructive so as to reap the associated benefits. There is a way to achieve this while also maintaining a well-functioning monetary system, which is for the central bank to innovate in the way it provides central bank money to the economy. Beyond the digital euro project, the Eurosystem has expanded its initiative to settle distributed ledger technology (DLT) based transactions in central bank money with a programme consisting of two complementary and mutually reinforcing tracks: Pontes and Appia. Pontes will provide a single Eurosystem solution by the end of the third quarter of 2026 (with the start of a pilot) linking DLT platforms and TARGET services incorporating features used in the Eurosystem's exploratory work on DLT in 2024. Appia complements this by aiming to foster an innovative and integrated ecosystem in Europe through collaboration with both public and private stakeholders. Together, these initiatives will help ensure that central bank money remains the trusted settlement asset in an increasingly digital financial system.

29. Digital assets and tokenised bonds are increasingly part of the financial landscape. How should eligibility for tokenised assets in the collateral framework be calibrated?

Digital innovation is transforming financial market infrastructures for securities issuance, settlement and servicing. The use of tokenisation in financial assets is increasing and has the potential to make financial services more efficient by automating, integrating and simplifying processes, and by enhancing transparency. Central Banks need to adjust to these technological developments, including with adjustments to their collateral framework.

In fact, the Eurosystem has taken a first step and is going to enable the use of marketable assets issued in central security depositories using DLT-based services as eligible Eurosystem collateral starting from 30 March 2026. These assets will need to be available for settlement in TARGET2-Securities (T2S) and are required to comply with the same Eurosystem eligibility rules as any other marketable asset accepted so far by the Eurosystem.

In addition to this first step, the ECB also announced that it has launched an ambitious work plan to explore how and under what criteria assets issued and settled entirely on DLT networks could become eligible and be mobilised as Eurosystem collateral in the future. This work will need to address a broad range of policy, legal and operational questions, including the criteria for issuance, settlement finality, the legal substantiation of ownership, and the operational modalities for mobilisation.

I believe this is just the beginning of an important area of exploration. There is the plan to further examine how legal and risk management considerations can be carefully balanced while maintaining key principles such as adequacy of collateral, safety, efficiency, and fairness in the system. I see this as an essential and meaningful endeavour that closely interacts with the mentioned other work on further developing the ECB’s role in payments and settlement systems.

30. How do you assess the risks and opportunities of the use of artificial intelligence, both from a macroeconomic perspective and in the ECB’s daily work?

The macro-financial implications of AI remain highly uncertain. For example, current estimates of AI’s impact on productivity growth range from near zero to over 2 percentage points annually. In an optimistic scenario, AI has substantial opportunities for productivity growth and living standards. At the same time, AI also entails macro-financial risks. Labour market disruption may increase inequality, depending on the balance between job creation and job replacement as well as wage beneficiaries and wage losers. Market concentration could increase as scale advantages in data and computing power favour big tech firms, potentially dampening competition and slowing the diffusion of growth opportunities. Widespread use of similar algorithms in financial corporations could amplify herding behaviour and procyclicality, while concentration among few technology providers creates systemic dependencies. In my view, this mix of risks warrants a cautious, datadriven approach that distinguishes genuine productivity gains from euphoria, cyclical or oneoff effects and actively monitors new concentrations of risk.

For monetary policy, this has potentially significant implications. If AI substantially raises productivity growth, this could increase the economy’s “speed limit” and the equilibrium real interest rate. At the same time, widespread adoption of AI technology could accelerate firms’ price reactions to shocks. At the micro-level price algorithms could differentiate more drastically across consumers, while it remains an open issue to which extent they will compete or collude across firms. Finally, the transmission of monetary policy may be affected in multiple ways through the effects of AI on labour markets, distribution and the financial sector.

Also from a financial stability perspective, there are both benefits and risks which new generative AI tools will likely bring, depending on how data, model development and deployment are handled. Already existing risks can be amplified through high technological penetration and supplier concentration, also possibly leading to herding behaviour and market correlation. At the same time, AI can bring benefits by increasing resilience of the financial system via improved information processing, supporting decision making, and through efficiency gains when automatising tasks. For all these reasons, the ECB must monitor these developments closely.

From an operational perspective, the ECB is progressively integrating AI across the institution, while maintaining all necessary safeguards. In my view, this is a positive development that strengthens realtime analysis, improves efficiency and supports betterinformed decisionmaking. At every stage, however, the use of AI must remain transparent, explainable and secure, with humans firmly in the loop and fully accountable for policy-relevant decisions.

31. Do dollar-denominated stablecoins pose threats to financial stability and monetary sovereignty and how could the international role of the Euro be enhanced in this context?

As remarked in previous questions, stablecoins have grown rapidly throughout 2025, with the stablecoin market being dominated by USD denominated stablecoins, and in particular two large players, USDT (Tether) and USDC (Circle). Euro-denominated stablecoins remain very small in comparison though they have grown quickly. The Markets in Crypto-Assets Regulation (MiCAR) provided regulatory clarity and the EU is thereby at the forefront of mitigating risks and providing clear rules for stablecoin issuers and those offering stablecoin-related services.

Stablecoins may pose financial stability risks, arising from certain inherent structural weaknesses and their interconnectedness with traditional finance. At the same time, financial stability risks at the current juncture are limited in the euro area, notably because stablecoins are not widely used for transactions involving real-world assets, and did not cause significant retail deposit outflows. It is particularly interesting to look at the current use cases for stablecoins, in order to understand who uses them for what and with which risk: The by far dominant use case for stablecoins is crypto trading. This means, stablecoins are used primarily within the crypto ecosystem, and they are therefore essential primarily for and within this ecosystem. This notably means that within the “real world”, they so far only play a minor role, and there is no concrete evidence that stablecoins are used systematically for remittances or other cross-border transaction.

A growing adoption of USD denominated stablecoins could potentially undermine the euro area's monetary sovereignty and strategic autonomy if they became widely used for payments in the euro area. Thus, such a wide use could reduce demand for the euro, shift payment activity outside EU infrastructures and increase dependence on non-EU issuers and intermediaries which in turn could weaken monetary policy transmission and the Eurosystem's ability to steer liquidity and safeguard the safety and efficiency of payment systems. In my view, safeguarding the role of the euro as the trusted monetary anchor is essential to prevent such risks from materialising. MiCAR contains guardrails on the use of foreign currency denominated stablecoins in Europe, which are designed to address these risks. In my view the challenge is enforcing these rules.

Europe already benefits from safe and efficient payment systems. And I would like to raise the importance of the euro, our central bank money, which is the trusted anchor of our monetary system. It is crucial to preserve this role of the euro, and hence it is imperative that we also bring our central bank money into the digital age. The digital euro project and the work to enable settling distributed ledger technology (DLT) transactions using central bank money via a dual track-approach (Pontes and Appia) are of key importance in this respect and will be instrumental in preserving monetary sovereignty.

As I already mentioned, providing tokenised central bank money will be instrumental to support an integrated European market for digital assets. Vibrant, deep and liquid markets for European digital assets will attract foreign investors, thereby boosting the international role of the euro.

32. What are the main structural obstacles to strengthening the international role of the euro, and how can the ECB contribute to addressing them?

The euro is facing a window of opportunity to strengthen its international role. Concerns over the longterm stability and reliability of the United States as a global economic partner have led investors to reassess the dollar’s safe haven status, and recent episodes – such as the market reaction to tariff threats linked to tensions around Greenland – have shown that the euro can increasingly behave as a safe haven. Yet, despite such signs of shifting perceptions, there has not so far been a broad reallocation away from dollar assets. This underlines that, while the euro’s potential is significant, structural obstacles still constrain its ability to translate episodic safehaven behaviour into a more durable, broader international role.

From a structural perspective, three main sets of obstacles stand out and here I very much concur with the analysis that the ECB President presented in her speech “Earning influence: lessons from the history of international currencies” on 26 May 2025 in Berlin. First, Europe’s geopolitical weight and trade power are not yet fully translated into coherent external action. Although the EU is the world’s largest trader and the euro is used to invoice around 40% of its trade, fragmentation in foreign and security policy, and the difficulty of speaking with one voice, limit Europe’s geopolitical credibility and thus the willingness of partners to hold euro assets. Second, the euro area’s economic foundations remain weaker than those underpinning the other global currencies. Economic growth remains lower, capital markets are fragmented, and the supply of highquality eurodenominated safe assets is constrained. Third, institutional and legal complexity, including the prevalence of vetoes in key policy areas, hampers timely collective decisions and obscures from the outside the strength of the EU’s commitments, even though the strong foundations in terms of the rule of law and the independence of the ECB are major comparative advantages. By advancing EU integration and pursuing an ambitious reform agenda the EU will increase the attractiveness of the euro and thus overcome these obstacles.

Within its mandate, the ECB and Eurosystem can contribute in three key areas. First, improve crossborder payment systems involving the euro by interlinking fast payment system with key foreign partners. Second, support the emergence of a European digital asset ecosystem to increase the efficiency and attractiveness of European financial markets. Third, reinforce the

global use of the euro by providing euro liquidity lines to noneuro area central banks. The network of swap and repo lines, currently involving major advanced economy central banks and several regional partners, acts as a backstop against euro liquidity shortages abroad that could disrupt the smooth transmission of monetary policy. Over time, greater use of the euro for trade invoicing and financial contracts would reduce the passthrough of exchange rate movements into euro area import prices and thus the sensitivity of euro area inflation to external shocks, in line with the price stability mandate.

33. What are your views on the digital euro? To which extend do you consider it could help addressing the challenges mentioned above?

In my interviews as Governor, I have emphasised the vital role central banks play – within their mandate – in ensuring that citizens have seamless access to, and ease of use of, public money for their daily transactions. This principle applies not only to the physical space – with cash – but should also extend to the digital realm. To uphold this, it is essential to develop a digital version of cash: the digital euro. The digital euro is not intended to replace cash but to complement it, safeguarding the relevance and accessibility of public money in an increasingly digitalized world. It would be available to users anytime and anywhere in the euro area, allowing them to make payments free of charge – online or offline – on websites, in stores, or between individuals.

In my view, a digital euro is also essential for strengthening Europe’s monetary sovereignty and addressing key challenges in an evolving global landscape. It will help reduce reliance on non-European-dominated payment platforms, thereby providing a secure and autonomous payment system. Furthermore, the digital euro would bolster the euro’s global competitiveness, positioning it as a trusted and innovative currency for digital payments. Complementing the ongoing strategy for developing DLT compatible central bank money for wholesale use, with Pontes and Appia, the digital euro would actively drive financial innovation and promote market integration across Europe, all while safeguarding monetary sovereignty. This approach would maintain Europe’s independence in the financial sector and reinforce its leadership in the digital economy. Let me reiterate that future-proofing Europe’s monetary system is particularly crucial in light of the challenges posed by stablecoins, especially non-EUR-denominated ones that currently dominate the market. The growing prevalence of USD-denominated stablecoins risks creating new dependencies that could compromise Europe’s monetary autonomy and diminish the euro’s role in global digital finance.

Importantly, the digital euro is not designed to compete with existing European private payment solutions. Instead, it aims to serve as a public, secure, and European-governed alternative, offering citizens an additional complementary payment option while strengthening Europe’s monetary sovereignty and resilience. Furthermore, it will provide a robust, technically advanced platform that enables European private payment providers to connect seamlessly with customers across the region, fostering greater innovation and accessibility within the payments ecosystem.

Finally, the digital euro is a shared European project. Its success will depend on robust legislation and broad democratic legitimacy. The European Parliament plays a central role in adopting the legal framework. I am committed to engaging constructively with Parliament and other stakeholders to ensure that the digital euro meets citizens’ expectations, strengthens Europe’s strategic autonomy, and supports trust in our monetary system for the decades ahead.

E. Functioning of the ECB and democratic accountability and transparency

34. Central bank independence is a cornerstone of the ECB’s institutional design. However, the scope of ECB action has expanded in recent years, while independence remains unchanged in formal terms. How should independence be preserved and exercised in practice as the scope of ECB action evolves while preserving institutional balance?

Central bank independence remains indispensable for delivering on the ECB’s primary objective of price stability, a point firmly established in extensive theoretical analyses and empirical evidence. Independence enables the ECB to take forwardlooking decisions with a mediumterm horizon, free from shortterm political pressures, and grounded in the analytical evidence needed to keep inflation expectations well anchored. In my view, this set-up is precisely what allows monetary policy to remain credible and effective in an environment marked by heightened uncertainty and structural change.

This crucial independence is best preserved through the accountability architecture between the ECB and the European Parliament. In the last years, the two institutions have deepened their engagement materially – through more frequent interactions and innovations to make their dialogue more interactive – thanks to the commitment from both institutions. This has allowed the ECB to remain responsive to evolving challenges and scrutiny demands, providing transparency on the ECB’s actions taken under its monetary policy mandate. Further, the accountability dialogue has been extended substantially in the face of the establishment of the Single Supervisory Mechanism, governed by its own accountability framework, and the ongoing work on a digital euro, with several dedicated hearings each year. Maintaining this close and dynamic dialogue will continue to be essential, especially as the ECB navigates uncertainty and structural changes to the economy. This must be complemented by continued communication with the general public that is clear and accessible, and by engaging with stakeholders across society.

Looking ahead, the ECB must – in my view – continue to exercise its independence with great discipline: firmly focused on its mandate, transparent about its decisions and constraints, and respectful of the institutional balance set out in the Treaties.

35. Which elements of the current accountability framework between the ECB and the European Parliament could be strengthened to allow for more meaningful parliamentary scrutiny?

Accountability is a crucial counterpart to central bank independence. It is essential for maintaining a central bank’s credibility and democratic legitimacy, and it ultimately supports the effectiveness of central bank policies and citizens’ trust in the institution. An accountability framework that enables informed and critical scrutiny by the European Parliament is therefore very much in the ECB’s own interest.

The relationship between the ECB and the European Parliament has developed over time, responding to increased scrutiny requests, and goes well beyond the requirements in the Treaty. The regular dialogue, notably in the ECON committee, has been enriched by innovations from both sides of this relationship, such as the ECB’s introductory statement in charts and the chance for MEPs to ask follow-up questions, which have clearly strengthened the dialogue and allow for a dynamic and granular discussion of complex and evolving policy issues. The Exchange of Letters between the ECB and the European Parliament is an additional demonstration of the quality and mutual commitment in this relationship.

At the same time, meaningful parliamentary scrutiny must be accompanied by the broader public’s understanding of the ECB’s mandate and decisions and their implications. Direct communication with citizens is therefore integral and can reinforce the effectiveness of parliamentary oversight. Ensuring that complex policy issues are explained in an accessible and transparent manner, both in interactions with the European Parliament and in outreach to the general public, remains a priority.

If appointed, I would remain fully committed to maintaining openness, availability and constructive engagement with the European Parliament. A central bank’s independence and its accountability are mutually reinforcing pillars, and I see a strong, transparent relationship with Parliament as essential to preserving both.

36. What conclusions do you draw from the comparison between the transparency policies followed by the ECB and other main central banks on international level?

The comparison with other major central banks confirms that a high degree of transparency is now a core element of modern central banking. Helping the public understand the ECB’s monetary policy is crucial for credibility and effectiveness. Transparency also complements accountability and builds trust in the institution. At the same time, it is equally important to be transparent about what central banks cannot do, in order to avoid unrealistic expectations that could ultimately damage trust.

International comparisons also highlight that transparency inevitably involves tradeoffs. Full disclosure at all times is not necessarily desirable. Central banks must protect the effectiveness of their policies, avoid fuelling market volatility with overly granular or speculative information, and preserve the integrity of internal deliberations so that policymakers can debate freely. Transparency should maximise clarity and predictability while safeguarding the conditions for sound decisionmaking.

Against this background, I believe the ECB’s practices stand up well in international comparison. External assessments consistently place the ECB among the most transparent central banks globally. The evolution of the ECB’s transparency and communication practices - such as the publication of monetary policy accounts, clearer and more structured press statements, and increased use of visuals and plain language – illustrates the institution’s willingness to adapt and improve.

Looking ahead, I see transparency as an ongoing responsibility rather than a completed task. As the environment becomes more complex – marked by geopolitical tensions, technological change, and heightened uncertainty – the need for clear, accessible and forwardlooking communication only increases. If appointed, I would be committed to contributing to this ongoing effort. In my view, modern central banking requires a continuous dialogue with citizens and their democratically elected representatives.

37. How do you personally intend to improve and promote gender balance within the ECB?

I am convinced that a diverse and inclusive workforce is essential for the ECB’s legitimacy and effectiveness as a public institution serving all Europeans. When different perspectives are represented at all levels, decisions become more robust, better informed and more reflective of the society we serve. This is why I fully support the ECB’s commitment to improving gender balance, and I would contribute actively to advancing this.

This is a long term, institution wide effort: identifying and addressing barriers at each stage of the career path, from how roles are advertised and candidates are selected to how staff are empowered to contribute once they have joined. The ECB already has in place a number of programmes and measures to foster improvements in the gender balance, as well as to support diversity and inclusiveness in general. Initiatives such as the ECB’s Scholarship for Women in economics and related fields, mentoring schemes, and careful communications and recruitment practices to avoid hidden biases are important building blocks in developing a strong pipeline of future female central bankers.

Improving gender balance also means creating an environment in which women can thrive throughout their careers, from trainees to senior managers. I would therefore support measures that make demanding roles compatible with personal and family responsibilities, such as flexible working arrangements and accessible, high-quality childcare. This is beneficial for both men and women and part of a modern approach to staff development. More broadly, I am convinced that diversity only leads to better outcomes if it is matched by genuine inclusion: everyone, regardless of gender or background, must have the space and encouragement to speak up and shape policies with their expertise and experience.

I am also a strong supporter of measures aimed at recognising individuals' potential, both that of younger colleagues new to the world of central banking and that of more experienced members of staff. In addition, I believe that the future of any institution requires recognising excellence. These two principles, while not aimed specifically at improving gender balance or increasing diversity, should, in my view, be overarching principles of an institution, and lead to concrete results. The principles are key factors in hiring and promotion decisions at the Croatian National Bank. As a result, 50% of managers and 63% of employees at the Croatian National Bank (as of 2024) are women. These ratios are higher than in many central banks, including those of the ECB.

38. What do you think about the fact that the Council in the past once ignored the opinion of the European Parliament regarding the appointment of an ECB board member?

The European Parliament, as the direct representative of EU citizens, plays a central role in ensuring the ECB’s democratic legitimacy, including through its involvement in the appointment of Executive Board members. As I have mentioned already, accountability to the European Parliament is the necessary counterpart to the ECB’s independence, and the European Parliament’s opinion on appointments is an important element in that regard.

At the same time, the procedures and the respective roles and competences of the Council and the European Parliament in the appointment procedure are laid down in the Treaties. As a candidate, it is not for me to take a view on how these interinstitutional relations are handled. I can only respect the established framework and follow the appointment procedure.

39. Will you accept your appointment as Vice-President of the ECB if the European Parliament were to vote against it?

As outlined in my answer to the previous question, the European Parliament’s opinion on my standing professional experience is an important step in the appointment process. It also lays the foundation for a fruitful accountability relationship. This questionnaire and my upcoming hearing are key parts of your assessment of my competence and experience. I feel privileged to have been recommended by the Council for this position, and I appreciate this opportunity to engage with the European Parliament to present my experience, competences and views. I therefore hope that you gain sufficient insights to assess my suitability for the position positively and look forward to the constructive dialogue.

The rapporteur declares under her exclusive responsibility that she did not include in her report input from interest representatives falling within the scope of the Interinstitutional Agreement on a mandatory transparency register, or from representatives of public authorities of third countries, including their diplomatic missions and embassies, to be listed in this Annex pursuant to Article 8 of Annex I to the Rules of Procedure.