ECB Members Say Additional Action Can Be Taken

by on November 25, 2013 12:15 am GMT

A few European Central Bank (ECB) officials acknowledge that the central bank can take further steps within monetary easing in order to further aid a eurozone recovery.

ECB executive board member Joerg Asmussen said that the central bank could and will take further action of to was necessary. The benchmark rate was cut by 25 bps earlier this month, and last week a report suggested that negative deposit rates were the next step, buy Asmussen said cautious implementation would be needed.

“We will take further action if it is necessary to ensure price stability in the whole of the eurozone,” said Asmussen during a conference in Berlin.

After saying that the bank has numerous interest rate-linked tools and unorthodox measures, if need be, at their disposal, it would not be “sensible” to continue to talk about the situation on a daily basis, which could create an impression that the it is worse than the bank actually deemed.

But, lets face it, ECB, it’s pretty bad.

Another executive board member, Benoit Coeure, said that a low interest rate environment will be available for as long as it is needed. Coeure said “we have said that in the view of the subdued outlook for inflation we expect interest rates to remain at current or lower levels for an extended period of time,” while at a conference in Paris.

Mario Draghi, the president of the ECB, tried to calm the waters late last week by talking down the possibility of negative deposit rates. The notion of the ECB moving to negative deposit rates was a matter of leaked information by individuals familiar with non-public ECB discussions.