25 June 2015

ECB（欧州中央銀行）イブ・メルシュ理事、資産買取プログラム、金融政策と構造改革、EU（欧州連合）5機関トップによる報告書について演説

Speech by Yves Mersch, Member of the Executive Board of the ECB, 
Discussant Prof. Hannah Scobie, Chairman, European Economics & Financial Centre, 
European Economics & Financial Centre, London, 25 June 2015

Implementing large-scale asset purchases

The first point relates to our monetary policy and our decision to expand the APP in January. While in some quarters this was seen as excessive activism, in others – often on this side of the Channel – it was seen as excessively hesitant. The argument was that as a price stability-oriented central bank with a symmetric mandate, we should have followed other major central banks and deployed asset purchases sooner to push inflation back to our objective.

[...]

At the start of 2014 we were confronted, on the one hand, with a consistent and broad-based downward trend in past inflation, falling from 3% at the end of 2011 to less than 1% at the beginning of 2014. But on the other, sentiment on the economic outlook was relatively positive for the year, with nearly all forecasters expecting the recovery to strengthen as the year progressed. In this context, we felt relatively comfortable that the medium-term inflation outlook was secure. While we were very alert to the risks to that outlook, there was no clear justification for a strong expansion of the monetary policy stance at that time.

Moreover, the use of large-scale asset purchases was unprecedented in the euro area and came with concerns that do not exist in other advanced economies. [...] In my view, deploying asset purchases had to be an ultima ratio decision. We had to see clear evidence of heightened deflationary risks either in the realised inflation data or in the movements of inflation expectations.

That evidence started to appear in the summer of 2014 as the macroeconomic situation worsened unexpectedly and the underlying impetus that we saw earlier in the year faded. [...]

These data, especially measures of inflation expectations, were sufficiently decisive to warrant our shift to large-scale asset purchases in January this year. [...]

First, we had taken a series of expansionary measures throughout 2014 in response to the incoming data, including cutting our main refinancing rate to its effective lower bound; introducing a negative rate on our deposit facility; launching our targeted long-term refinancing operations (TLTROs); and, importantly, in September 2014, with our decision to begin purchases of ABS and covered bonds.

Second, by communicating clearly the conditions under which we would use large-scale asset purchases – our so-called reaction function – we had already initiated a gradual easing of financial conditions as markets anticipated our measures. [...]

Third, even though our measures were partly priced-in, when they were launched the initial impact was stronger than many expected and the response of macroeconomic indicators was quicker. [...]

As a result, the economic recovery has broadened and the June ECB staff projections now envisage inflation to average at 0.3% in 2015, 1.5% in 2016 and 1.8% in 2017. Our actions have proven timely and provide us, so far, with comfort that the medium-term inflation outlook is secure. Both output and inflation forecasts are broadly balanced.

These forecasts are however contingent upon a full implementation of our programme. We intend to carry out our public sector purchases until end-September 2016 and, in any case, until we see a sustained adjustment in the path of inflation. Only once we see convincing evidence that inflation has returned sustainably to levels in line with our objective will we be able to declare success.

Monetary policy and structural reforms

[...] In a nutshell, in the euro area, the more divergent economies become in terms of their structural conditions, the harder it ultimately becomes to achieve price stability at the euro area level.

First, structural reforms have a direct link to inflation, inflation expectations and real interest rates through their effect on the adjustment process.

[...]

Second, structural factors can compound adjustment difficulties by affecting the transmission and effectiveness of monetary policy across different countries.

[...]

Third, if due to structural factors shocks leave deep scars on some economies, it can affect the long-term cohesion of the Union.

[...]

The ECB’s interest in structural reforms therefore has two dimensions: achieving an efficient implementation of monetary policy in the short-term, and maintaining the integrity of the currency over the longer-term. Both of these feed into euro area price stability. However, our interest is not in how countries implement reforms. This is a national question and there are different models that can work in a monetary union. Our interest is in  whether they succeed in doing so, as it is this that has implications for the whole euro area. It is in this context that we at the ECB have recently called for stronger common governance in this area.

[...]

Institutional responses to our economic challenges

So my third point is that we need to reflect seriously on the key features of a well-functioning monetary union, and how we can progress towards establishing them. A lot of progress has already been made in strengthening our rules and institutional architecture. We have reinforced our fiscal rules and improved the coordination of our economic policies. And we have made a huge institutional leap with Banking Union, establishing the Single Supervisory Mechanism (SSM) within the ECB and a Single Resolution Mechanism (SRM). But we know that the architecture of EMU is not yet complete, and the Five Presidents’ Report published this Monday describes how to take this process to the next level.

[...] The ECB fully supports this process and will continue to actively contribute to it. Let me highlight what we see as two crucial aspects of the report.

First, the report makes a strong case for completing Banking Union. It calls for finding a swift agreement on bridge financing and a permanent backstop for the Single Resolution Mechanism (SRF), with the ESM identified as the natural institution to act as a backstop for the SRF, while remaining fiscally neutral. [...]

Second, the report advocates a long-term sovereignty shift in both economic and fiscal policies – a ‘move from rules to institutions’. Most importantly, the report calls for a new economic convergence process to make the euro area more resilient against shocks, which would in turn make further sharing of sovereignty in the fiscal domain possible. It also proposes eventually establishing a euro-area treasury to take decisions jointly on certain elements of national budgets. [...]

Conclusion

Our forceful monetary policy measures were first, necessary, second, timely, and, third, effective. The economic recovery is now proceeding at a moderate pace. And we see encouraging signs that it is broadening.

[...] Structural reforms are needed to strengthen the supply side and help economies regain a competitive edge in a globalized economy. And only with such an increased growth potential will the cyclical recovery become a sustained, structural recovery.

[...] now that the worst may lie behind us, we have to keep the momentum of further integration. The 5 Presidents’ report is a useful roadmap for the way ahead.

A strong commitment to completing Banking Union will ease financing conditions for enterprises sustainably, and increase the resilience of Europe’s financial landscape with a view also to hemming in contagion. Likewise, a long-term sovereignty shift in both economic and fiscal policies will stimulate convergence towards similarly resilient economic structures, based on common standards. Not everything can be achieved today, but all countries agreeing on the same way forward is a key element for higher confidence and a lasting end to this crisis.

Full speech

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