In a speech, ECB President Christine Lagarde said the central bank’s commitment to preserve favorable financing condition to support all sectors of the economy implies “looking at indicators along the whole transmission chain of our monetary policy – from risk-free rates to government borrowing costs to capital markets to bank lending for firms and households.”
“Within the broad-based set of indicators that we monitor to assess whether financing conditions are still favourable, risk-free overnight indexed swap (OIS) rates and sovereign yields are particularly important”. Accordingly, she added, “the ECB is closely monitoring the evolution of longer-term nominal bond yields.”
