The ECB Needs to Explain Itself | Forex Factory

  • The ECB Needs to Explain Itself

    From project-syndicate.org

    Finland’s central bank governor, Olli Rehn, has reiterated his call for the European Central Bank to conduct a long-overdue review of its policy framework. The upcoming change of leadership at the institution – with Christine Lagarde, the International Monetary Fund’s managing director since 2011, likely to succeed Mario Draghi as president – offers an important opportunity to heed that call. When the ECB was established 20 years ago, central banks were generally not too clear about the details of their policy frameworks. At that time, some ambiguity may have been helpful, because of the flexibility it ... (full story)

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RossEdwards
Jul 8, 2019 2:36pm
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Yes.. Ollie Renn has a good point. However the redefinition of ECB powers on too specific a basis is not in the interests of anybody. The EU is itself necessarily a heavily rules based system. As anyone whos ever been responsible for operating in a commercial capacity under a tight mandate will appreciate some vagueness is essential, otherwise the limits of the mandate can and will be used by those intent on undermining it. And nobody better than market speculators. So good its reviewed.. but bad if its too tightly redefined.
Just a Thought#
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AnniLi
Jul 8, 2019 3:35pm
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Some important factors are missing in this article. 1. The mystery of very low inflation rates and therefore interest rates. 2. The US renewed emphasis on trade protectionism, coupled with use of sanctions and other policies. 3. The shift away from market capitalism in trade and foreign policies. 4. Internal EU confusion.

ECB is operating within a political food blender while trying to be a central bank. Survival is the immediate goal.
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bshappens
Jul 9, 2019 1:52am
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Quoting AnniLi
Some important factors are missing in this article. 1. The mystery of very low inflation rates and therefore interest rates. 2. The US renewed emphasis on trade protectionism, coupled with use of sanctions and other policies. 3. The shift away from market capitalism in trade and foreign policies. 4. Internal EU confusion. ECB is operating within a political food blender while trying to be a central bank. Survival is the immediate goal.
1. The mystery of very low inflation rates and therefore interest rates.

Seems like a big chunk of influx money doesn't end up in the market.
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