Final of the 15th edition of the Generation €uro Students’ Award

16/04/2026

The final of the 15th edition of the Generation €uro Students’ AwardAbre en ventana nueva takes place this Friday, 17 April!

This competition, aimed at upper secondary and intermediate vocational training students, has one goal: to help them understand the workings of monetary policy, i.e. the decisions taken by the EurosystemAbre en ventana nueva (the European Central Bank (ECB) and the euro area national central banks) to keep prices stable.

But perhaps you’re wondering: what exactly is monetary policy, and what does it matter to me? Monetary policy is the set of measures taken by the monetary authority (which, for the euro area, is the Eurosystem) to keep inflation under control. And yes, while it may sound technical, it affects you more than you might think.

For example, when the ECB decides to lower the interest rates at which it lends to banks, interest rates on loans will come down after a while and, if you have a variable-rate loan, your repayments could decrease. That’s good news for your wallet. But there’s a flipside: when rates go down, inflation may rise over time, which means you’ll pay more for consumer goods and services.

The opposite can also happen: the ECB may decide to raise interest rates because inflation is very high. In this case, the interest rates on bank loans to firms and households may rise and, if you have a variable-rate loan, your repayments will increase.

Through its monetary policy decisions, the ECB influences the interest rates that commercial banks offer to their customers (firms and households), but it doesn’t set them.

In short, monetary policy may seem distant, but it has a direct influence on your day-to-day life. And this competition is a great opportunity to discover how it works and why it’s so important.

You can find more information on what monetary policy is and how it operates on the Banco de España’s website, in the financial education programme sections on inflation and in the FAQs about monetary policy.Abre en ventana nueva