[THREAD] In his speech at the #ECBForum, President Mario Draghi spoke about the past twenty years of the ECB’s monetary policy and the outlook for the future. #Euroat20 1/11
The first decade of Monetary Union was characterised by calm macroeconomic conditions, with limited volatility and steady economic growth. The second decade, however, has seen profound shifts in the prevailing environment. Our monetary policy strategy has had to adapt. 2/11
We responded in three main ways: by clarifying the symmetry of our aim, by laying out the tools we would use to counteract downside inflation risks and by operationalising our reaction function by launching a series of new instruments. 3/11
Our capacity to react in this way was made possible by the flexibility embedded in our mandate. The recent ruling of the European Court of Justice emphasised the broad discretion of the ECB in using all our tools in a necessary and proportionate way to achieve our objective. 4/11
Just as our policy framework has evolved in the past to counter new challenges, so it can again. In the coming weeks, the Governing Council will deliberate how our instruments can be adapted commensurate to the severity of the risk to price stability. 5/11
In the absence of improvement, such that the sustained return of inflation to our aim is threatened, additional stimulus will be required. 6/11
In the current environment, what matters is that monetary policy remains committed to its objective and does not resign itself to too-low inflation. 7/11
The journey towards greater integration that started twenty years ago is far from finished. Success has been broad but uneven. 8/11
Overall, the journey of the past twenty years has strengthened the conviction of our peoples that it is only through more Europe that the implications of this integration can be managed. 9/11
For some, that trust may lie in a genuine faith in our common destiny. For others it comes from the appreciation of the greater prosperity so far achieved. For yet others that trust may be forced by the increased and unavoidable closeness of our countries. 10/11
Be that as it may, that trust it is now the bedrock upon which our leaders can and will build the next steps of our EMU. Read the full speech here ecb.europa.eu/press/key/date… 11/11
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President Christine @Lagarde and @LSEnews Director Minouche Shafik discussed the impact of gender bias on education, home life, the workplace and leadership in this episode of #TheECBPodcastpod.link/1481819425/epi…
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🧵 The digitalisation of finance has broadened payment options, with emerging fintechs, big techs and cryptos causing disruptions, says Executive Board member Fabio Panetta at the @bundesbank. We need to preserve an anchor of stability for the monetary and payments systems.
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Panetta: Safeguarding this anchor is what our digital euro project is all about. We want to ensure that central bank money remains available to everyone in the euro area. But we also need to modernise the payment infrastructure underpinning our financial system.
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Panetta: Central bank money already exists in digital form for wholesale purposes. Wholesale central bank digital currency projects are about making digital interbank transactions, such as securities settlement and cross-currency payments, safer and more efficient.
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🧵 We must be prudent, recognising what we can do, but also what we cannot do, Executive Board member Fabio Panetta tells @LaStampa. We have limited room to cool imported inflation but we must prevent the rise in inflation from becoming entrenched.
Panetta: With medium-term inflation around 2%, we can gradually reduce stimulus.
But we must remain data-driven. It would be unwise to act without fully understanding how the war and global factors will affect inflation, demand and production. Uncertainty is enormous
2/4
Panetta: We must prevent monetary adjustment from being accompanied by higher financial fragmentation. If the latter impedes monetary policy transmission, we should intervene decisively, building on the success of our pandemic purchase programme and the Next Generation EU
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The Russian invasion of Ukraine has cast a dark shadow over our continent, says Vice-President Luis de Guindos as he presents our 2021 Annual Report to the @Europarl_EN
De Guindos: The war in Ukraine is above all a human tragedy causing enormous suffering. But it is also affecting the economy in Europe. Growth will be slower than expected and inflation is likely to remain high in the coming months
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De Guindos: The war has also exposed major strategic vulnerabilities in Europe, including our dependency on fossil fuel imports. Speeding up the green transition is therefore crucial
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🧵 Globally coordinated efforts are needed to bring crypto-assets into a regulatory framework, says Executive Board member Fabio Panetta at @Columbia. We must not repeat past mistakes by waiting for the bubble to burst before acting ecb.europa.eu/press/key/date…
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Panetta: Unbacked crypto-assets can’t even fulfil their objective of facilitating payments, since they are too volatile to perform as money. We must decide how to regulate them, seeking a balance between innovation, financial stability and consumer protection
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Panetta: Crypto-assets already have a larger market than sub-prime mortgages had before the global financial crisis started. The longer we wait, the more exposures and vested interests build up. And the harder it will be to act
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