16 Jan 2014
ECB Monthly Report: Accommodative monetary policy stance to be kept for as long as necessary
FXstreet.com (Łodź) - In the January ECB monthly bulletin the Governing Council reiterated their forward guidance of keeping rates at current or lower levels for an extended period of time. An accommodative monetary policy stance would be kept for as long as needed, they declared.
“As previously stated, this expectation is based on an overall subdued outlook for inflation extending into the medium term, given the broad-based weakness of the economy and subdued monetary dynamics,” the Governing Council said. Therefore, they will continue monitoring developments in money markets and are prepared to act if necessary.
The risks for the Eurozone economic outlook remain on the downside. Global economic uncertainty, as well as higher commodity prices, weak domestic demand and export growth or EU Member States' insufficient reform efforts could weigh on the Eurozone recovery.
Moreover, the Governing Council pointed to the improved funding situation of Eurozone financial institutions and stressed the need for a consolidation of the area's fragmented banking system to strengthen it further.
“It will enhance the quality of information available on the condition of banks and result in the identification and implementation of necessary corrective actions,” the ECB stated. “A timely implementation of further steps to establish a banking union will help to restore confidence in the financial system.”
“As previously stated, this expectation is based on an overall subdued outlook for inflation extending into the medium term, given the broad-based weakness of the economy and subdued monetary dynamics,” the Governing Council said. Therefore, they will continue monitoring developments in money markets and are prepared to act if necessary.
The risks for the Eurozone economic outlook remain on the downside. Global economic uncertainty, as well as higher commodity prices, weak domestic demand and export growth or EU Member States' insufficient reform efforts could weigh on the Eurozone recovery.
Moreover, the Governing Council pointed to the improved funding situation of Eurozone financial institutions and stressed the need for a consolidation of the area's fragmented banking system to strengthen it further.
“It will enhance the quality of information available on the condition of banks and result in the identification and implementation of necessary corrective actions,” the ECB stated. “A timely implementation of further steps to establish a banking union will help to restore confidence in the financial system.”