ECB ‘needs to prepare for normal monetary policy’

ECB ‘needs to prepare for normal monetary policy’
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Sabine Lautenschlaeger looks on during a banking symposium in Frankfurt on Feb. 28, 2014. (Reuters)
ECB ‘needs to prepare for normal monetary policy’
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This file photo taken on March 9, 2017 shows the headquarters of the European Central Bank (ECB) in Frankfurt am Main, western Germany. (AFP)
Updated 29 July 2017

ECB ‘needs to prepare for normal monetary policy’

ECB ‘needs to prepare for normal monetary policy’

BERLIN: The European Central Bank should start thinking about how it wants to return to normal monetary policy and when it wants to wind down bond purchases, governing council member Sabine Lautenschlaeger said in remarks published on Saturday.
“The expansionary monetary policy has both advantages and side effects.
As time passes, the positive effects get weaker and the risks increase,” she told the Mannheimer Morgen newspaper.
“So it’s important to prepare for the exit in good time. What’s crucial in that context is a stable trend in the rate of inflation toward our objective of just under 2 percent. It’s not quite there yet.”
She acknowledged that unwinding the ECB’s expansive policy would be a long process.