The Eurosystem’s Monetary Policy Following the End of Net Asset Purchases
11 Pages Posted: 26 Feb 2019
Date Written: February 21, 2019
This article analyses the monetary policy conduct framework in the euro area following the end of net purchases under the financial asset purchase programme. First, there is a review of the monetary policy measures since 2014 and of the ECB’s announcements on the future course of its instruments, comparing the recent changes in euro area monetary policy with the normalisation of US monetary conditions initiated by the Federal Reserve in 2013. Second, the authors analyse the main instruments currently available to the ECB (forward guidance on interest rates and its asset portfolio reinvestment policy), and discuss how both instruments provide monetary stimulus in the current setting.
Keywords: central bank balance sheet, unconventional monetary policy, reinvestments
JEL Classification: JEL codes: E52, E58, E4
Suggested Citation: Suggested Citation