ECB Chief Economist Philip Lane told Il Sole 24 that the central bank “will do everything it can to ensure the current crisis won’t be made worse by a credit crunch.” For now, the asset purchases under the Pandemic Emergency Purchase programme “has proven to be particularly effective in the current state of uncertainty, market stress.”
Lane also said the traditional asset purchase program would “bring inflation in line with monetary policy target”. Emergency and temporary PEPP was to “face the very strong unprecedented negative inflation shock” from coronavirus pandemic, and “stabilize the financial markets”. Eurozone’s inflation is still far from the central bank’s target and quantitative easing will “still be needed.
