- Thursday, 26 October 2017
- News
ECB Tapers Asset Purchase Program to €30 Billion; Holds Rates Steady
After the European Central Bank (ECB) announced its decision to cut its monthly asset purchases (APP) in half, starting in January, and extend them for another 9 months from the initial deadline at the end of this year, the president of the monetary authority, Mario Draghi, gave an upbeat vision of the euro zone economy but insisted that further quantitative easing was needed in order to reach the ECB inflation target. In the announcement released 45 minutes ahead of Draghi’s appearance, the ECB said that it will begin to reduce monthly purchases in January from the current €60 billion ($70.6 billion) to €30 billion ($35.3 billion) and will extend those purchases to “the end of September 2018, or beyond, if necessary”. It added that it will “reinvest the principal payments from maturing securities purchased under the APP for an extended period of time after the end of its net asset purchases, and in any case for as long as necessary.”
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- Monday, 23 October 2017
- News
The ECB should fear the next recession
Considering the limits that govern the ECB’s government bond purchases, the central bank is quickly using most of its easing potential already now. There will be little left for the next recession, or crisis, which is problematic. The scarcity concerns the ECB is facing in its current bond purchase programmes are well-known. However, the longer-term consequences of such scarcities have not been discussed in detail. As the ECB is using most of its ammunition now and will not be able to reload quickly, there will be little capacity left to tackle the next recession – or debt crisis.
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- Tuesday, 12 September 2017
- News
ECB Constacio says inflation goals are to be reached by keeping policy accomodative
The non-standard measures that the ECB had to use in order to face the challenges of the crisis and the threat of too low inflation have been successful to avoid the worst for the European Monetary Union. From innovative liquidity facilities to asset purchase programmes and negative deposit rates, non-standard measures proved crucial to avoid deflation and foster the economic recovery.
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- Monday, 11 September 2017
- News
ECB has seen very little price pressure in recovery – Mersch
The European Central Bank has seen very little pressure on inflation despite an economic recovery and policymakers will discuss this autumn whether to curb stimulus, ECB Executive Board member Yves Mersch said on Monday. Mersch, considered a policy hawk, told Luxembourg radio station 100.7 in an interview that there were a number of reasons inflation was not rising, principal among them the relative lack of wage pressure.
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