The European Central Bank: Twenty-five Years of Single Monetary Policy in the Euro Area

Angelo Baglioni

Chapter Chapter 4 in Monetary Policy Implementation, 2024, pp 93-145 from Springer

Abstract: Abstract The analytical framework introduced in Chapter 3 is applied here to the implementation of monetary policy in the euro area. The traditional ECB’s operational framework was the interest rate steering—corridor system. Starting with the financial crisis of 2007/2008, the ECB has introduced a first set of “unconventional measures”: the years between 2008 and 2014 can be seen as a transition phase, during which the ECB’s implementation framework has evolved from a corridor to a floor system (albeit unofficially). With the adoption of APP and T-LTROs in 2015, the ECB started to explicitly target the size of its balance sheet. In the euro area, QE policies have been complemented by the negative interest rate policy. New QE measures have been adopted in 2020–2021 as a reaction to the pandemic crisis. In 2022, the ECB exited QE policies and started a normalization process. Despite a downsizing of its balance sheet, the ECB currently maintains an excess liquidity; the deposit facility rate is the key policy rate. Those different stages are discussed in this chapter and some descriptive evidence is provided. I will also address the strategy of the ECB and some issues related to the specific institutional framework of the euro area.

Keywords: ECB’s strategy; Longer-Term Refinancing Operations; Outright Monetary Transactions; Asset Purchase Program; Pandemic Emergency Purchase Program; Transmission Protection Instrument; TARGET balances (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-031-53885-8_4

Ordering information: This item can be ordered from
http://www.springer.com/9783031538858

DOI: 10.1007/978-3-031-53885-8_4

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().