Thread by @ecb

(THREAD) The coronavirus has produced a highly unusual recession and is likely to give rise to an unsteady recovery, says President Christine Lagarde in her opening remarks at the #ECBForum on Central Banking ecb.europa.eu/press/key/date… 1/6

Lagarde: This unusual recession has posed exceptionally high risks and required an exceptional policy response. What has defined this response is the policy mix. Macroeconomic, supervisory and regulatory authorities have dovetailed and made each other’s efforts more powerful 2/6

Lagarde: A continued, powerful and targeted policy response is vital to protect the economy, at least until the health emergency passes and vaccination is well advanced. The right policy mix is essential 3/6

Lagarde: The best contribution monetary policy can make is to ensure favourable financing conditions for the whole economy. This is why the Governing Council announced last month that we will recalibrate our instruments, as appropriate, to respond to the unfolding situation 4/6

Lagarde: While all options are on the table, the PEPP and TLTROs have proven their effectiveness in the current environment and can be dynamically adjusted to react to how the pandemic evolves. They are likely to remain the main tools for adjusting our monetary policy 5/6

Lagarde: The European policy mix has proven that when different authorities work together, countries can successfully absorb the pandemic shock. The second wave presents new challenges and risks, but the blueprint for managing it is the same ecb.europa.eu/press/key/date… 6/6