Hang loose: World has changed for ECB, says Lagarde
The European Central Bank (ECB) needs to keep monetary policy loose for a long time but should carry out a broader review of policy that also takes into account global challenges like climate change, Christine Lagarde, the nominee to be the bank's next president, said.
Facing unprecedented shocks, the ECB was forced to reinvent its toolkit over the past decade and has now exhausted many of the unconventional measures at its disposal without lifting inflation back to its target of almost 2pc. Acknowledging the world has changed since the ECB's last review in 2003, Ms Lagarde argued that like the Federal Reserve and the Bank of Canada, the ECB should conduct a broader review.
"2003 was a long time ago and many things have changed as far as the ECB is concerned," she told the European Parliament's committee on economic affairs in a confirmation hearing.