18 May 2015
ECB has taken ‘the right measures at the right time’ – ECB’s Mersch
FXStreet (Mumbai) - Speak to a radio in Luxembourg, the European Central Bank (ECB) Executive Board member Yves Mersch said that ECB policymakers are already seeing the effects of their signature quantitative easing program (QE) launched in January and they have no intention of prematurely ending the €60 billion government bonds a month purchases aimed at reversing deflation trends in the euro zone economy.
Key Quotes:
"We are seeing that ... we have stopped the negative bank lending rates and are starting to get new credit into the economy through the banking system,"
"But we also see ... we also have an effect on inflation, because at the same time there was a risk that Europe would slip into deflation,"
"We have based all our previsions on a projection where we see that growth is picking up, that inflation is getting closer to the inflation target, and that would be the case if we bought €60 billion every month,"
While "cyclical factors" also played their part, "at the ECB we are quite satisfied, that we have taken the right measures at the right time and that is probably why they were more effective,"
"If we stopped now, we would call into question our whole projection. We are currently on a trajectory; we believe in that trajectory, that trajectory so far seems to confirm to us that we are right. And therefore there is no reason to say: No, we are now calling into question everything again."
Key Quotes:
"We are seeing that ... we have stopped the negative bank lending rates and are starting to get new credit into the economy through the banking system,"
"But we also see ... we also have an effect on inflation, because at the same time there was a risk that Europe would slip into deflation,"
"We have based all our previsions on a projection where we see that growth is picking up, that inflation is getting closer to the inflation target, and that would be the case if we bought €60 billion every month,"
While "cyclical factors" also played their part, "at the ECB we are quite satisfied, that we have taken the right measures at the right time and that is probably why they were more effective,"
"If we stopped now, we would call into question our whole projection. We are currently on a trajectory; we believe in that trajectory, that trajectory so far seems to confirm to us that we are right. And therefore there is no reason to say: No, we are now calling into question everything again."