The Governing Council of the European Central Bank (ECB) has started this Thursday a review of its monetary policy strategy to address the low levels of inflation current and look for more tools to stimulate the economy In the next crisis.
"The monetary policy strategy was adopted in 1998 and some of its elements were clarified in 2003. The process is expected to be completed before the end of the year.. The Governing Council will follow two principles: exhaustive analysis and openness. Consequently, the Eurosystem will request the participation of all interested parties, "the agency explained in a statement after the process is expected to be completed before the end of the year. The Governing Council will follow two principles: comprehensive analysis and open mindedness. Consequently, the Eurosystem will request the participation of all interested parties, "the agency explained in a statement.
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The ECB has explained that, since 2003, the economy of the euro zone and world have experienced deep structural changes. The downward trend in growth, related to the decline in productivity and the aging of the population, together with the legacy of the financial crisis, have led to lower interest rates, reducing the ECB margin and from other central banks to relax monetary policy using conventional instruments against adverse cyclic events.
Moreover, deal with low levels of inflation It is different from the historical challenge of facing high inflation levels. The threat to environmental sustainability, rapid digitization, globalization and the evolution of financial structures have also transformed the environment in which monetary policy operates, including inflation dynamics.
Faced with these challenges, the Governing Council has decided initiate a review of your monetary policy strategy, fully respecting the ECB price stability mandate enshrined in the Treaty.
"Since our economies are undergoing profound changes, it is time to review the strategy to ensure that we fulfill our mandate for the benefit of Europeans," said Christine Lagarde, president of the ECB.
The Governing Council will evaluate the way in which the monetary policy strategy has contributed during these years to the fulfillment of the mandate contained in the Treaty and will consider if necessary adjust any of its elements.
The ECB price stability quantitative formulation, together with the approaches and instruments to achieve it, will be prominent elements of this exercise. The review will also take into account the way in which other aspects, such as financial stability, employment and environmental sustainability, may be relevant to the achievement of the ECB's mandate.
The Governing Council will evaluate the effectiveness and possible indirect effects of the set of monetary policy instruments developed in the past decade. It will also examine how the economic and monetary analysis should be updated through which the ECB evaluates the risks for price stability, also taking into account new and current trends. Finally, communication practices will also be reviewed.
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