ECB Executive Board member Isabel Schnabel told German news paper Die Zeit that the central bank is “ready to do everything in its mandate to counter market turmoil that disrupts monetary policy transmission, otherwise monetary policy cannot function,””. But she also cautioned against overestimating the power of central banks, and emphasized monetary policy alone could not solve the problem of coronavirus pandemic.
Italy’s 10-year benchmark yield spiked to as high as 2.983 earlier today, on comments from Austrian central bank head Robert Holzmann that ECB’s policy was at its limit. Additionally, Italy is the most serious epicenter of the pandemic in Europe. Holzmann’s comments problem and ECB official response, saying that the March 12 decision was unanimous and it stands ready to adjust all of its measures. Holzmann himself later also clarified that “Monetary policy has not yet reached its limits, not by a long stretch.”
