Sleijpen urges market integration to strengthen policy transmission
De Nederlandsche Bank (DNB) President Olaf Sleijpen says economic differences shape monetary policy transmission. At DNB's 29th Annual Research Conference in Amsterdam, he called for deeper capital markets, sound fiscal frameworks and a stronger single market.
One rate reaches different economies
A single monetary policy serves around 360 million people across twenty-one euro area countries, Sleijpen said.
Households differ in income, wealth, debt, housing and job security.
Higher rates raise savings returns for some but mortgage payments for others; employment and wages transmit indirect effects.
Recent DNB research identifies labor income, asset prices and interest payments as channels whose relative effects vary across households.
Firms' size, productivity, leverage and financing structures also shape investment responses.
Preliminary October 2026 inflation estimates illustrated national differences: 3.3 percent in the Netherlands versus more than 6 percent in Lithuania.
Sleijpen said inflation was too high across the board.
Three foundations for shared transmission
Sleijpen, also a professor at Maastricht University, identified three European priorities.
Deeper capital markets would broaden firms' funding options, improve private risk-sharing and direct savings into productive cross-border investment.
Sound public finances give governments room to absorb shocks, while credible fiscal frameworks help prevent sovereign debt concerns from disrupting transmission.
A stronger single market would let goods, services, capital and labor move more easily to their most productive uses.
Diversity is not the defect
Sleijpen argued that Europe need not make its economies identical.
The task is to prevent fragmentation and limited adjustment capacity from obstructing a common monetary policy.
He said research helps policymakers look beyond averages, test assumptions and understand trade-offs.