Golden Finance reported that the vice President of the European Central Bank, Kindos, recently made a statement, clearly stating that the European Central Bank has deeply learned lessons from its aggressive money-printing policy and will pay more attention to the side effects brought about by the loose monetary policy in the future.
After successfully curbing high inflation, the European Central Bank is now embarking on a re-examination of its long-term strategic and policy tool portfolio. Over the past decade, affected by persistently low inflation, the European Central Bank has implemented a large-scale bond purchase program and negative interest rate policies. Among them, a money-printing operation of up to 5 trillion euros (about 5.8 trillion US dollars) was carried out, which is well-known in the market as “quantitative easing/QE”. However, this policy has been highly controversial, being accused of giving rise to bubbles in the real estate and financial markets, and causing the European Central Bank to fall into a huge loss predicament after raising interest rates.
Kindos emphasized that “all the tools” used in the past will still remain in the policy toolkit, but he and his colleagues now have a clearer understanding of the drawbacks of these tools. He further pointed out that another important lesson drawn from past experiences is that “sometimes it is easy to activate policy tools, but it is extremely difficult to withdraw them.” This statement has drawn widespread attention from the market to the future direction of the European Central Bank’s monetary policy.
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