Mr Constâncio, ECB vice-president, spoke about the challenges to monetary policy for next year, 2012. His speech covered the current conjuncture and outlook for 2012, and the separate use of standard and non-standard monetary policy measures in order to fulfil the price stability mandate.
Based on the information available today, we expect to see inflation to stay above 2 per cent for several months to come, but it will decline to below 2 per cent during 2012.
Our determination to maintain price stability for the euro area as a whole over the medium term has made it necessary for us to intervene in dysfunctional market segments, thereby also contributing to the stability of the euro. We have already done a lot in this regard and we are ready to continue doing so, while remaining completely committed to our primary objective. The ECB is also open-minded to extending its non-standard monetary policy within its mandate, when circumstances require, as we have shown today. Overall, we have the available tools.
In setting our monetary policy for the euro area, we take full advantage of the principle of separation between standard and non-standard monetary policy. This principle suggests that actions on both sides can be taken independently. Moreover, our non-standard policy measures, for example taken in order to remedy adverse effects of financial contagion on the monetary transmission mechanism, are fully aligned with the ECB’s mandate and monetary policy strategy.
The ECB is able and willing to continue fulfilling central banks’ classical role as financial lender of last resort, handling liquidity problems in the financial system without endangering price stability.
Full speech
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