Regarding the upcoming policy recalibration, ECB Executive Board member Isabel Schnabel said it’s “appropriate to focus on preserving” the financing conditions, “rather than easing much further”. She emphasized, “if it’s necessary to do something that doesn’t meet market expectations, we have to do that nevertheless.”
“I indeed hope this will be the last big push (on monetary stimulus”, but we can never know what’s going to happen,” she said. “There is a positive scenario where we get a swift recovery and the scarring is relatively limited. But there is also the risk of the crisis being more protracted.”
She’s open to extending the PEPP window by 12 months to June 2021. On the topic of further rate cut, “there is no technical reason why this could not be lowered,” she said. “The question is whether this is considered appropriate.”
