The Eurosystem’s Monetary Policy Following the End of Net Asset Purchases

11 Pages Posted: 26 Feb 2019

See all articles by Oscar Arce

Oscar Arce

Banco de España

Galo Nuno

Banco de España

Carlos Thomas

Banco de España

Date Written: February 21, 2019

Abstract

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

Arce, Oscar and Nuno, Galo and Thomas, Carlos, The Eurosystem’s Monetary Policy Following the End of Net Asset Purchases (February 21, 2019). Banco de Espana Article 4/19. Available at SSRN: https://ssrn.com/abstract=3341314 or http://dx.doi.org/10.2139/ssrn.3341314

Oscar Arce (Contact Author)

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Galo Nuno

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

Carlos Thomas

Banco de España ( email )

Alcala 50
Madrid 28014
Spain

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