Currency and Financial Markets ECB Economic Policy Macroeconomics Monetary Policy

Statement on the Decision of ECB’s Governing Council 03/10/2016

With its decision the ECB is sending a strong signal that it is strongly determined to use all of its instruments to pursue its mandate of price stability. The further expansion is massive and surprising.The decision underlines the ECB’s concerns over a weakening European economy and the banking system. The ECB had no other choice than to further ease its monetary policy stance given the continued risk of deflation and the weaker outlook for the European economy. Despite all the concerns in Germany about the side effects of the expansionary monetary policy, one should not forget that the ECB’s task is to conduct monetary policy for the euro area and not for Germany alone.The decision of the ECB implies an even longer period of zero interest rates in Europe.


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