Specialist
Divisional head at Allianz SE
Agenda
- The ECB’s (European Central Bank’s) movements away from forward guidance and its impact
- Current inflationary environment and potential evolution
- Effectiveness of unconventional policies and new TPI (transmission protection instrument) anti-fragmentation tool
- Policy options for a suboptimal currency area
- Core mandate credibility and green bonds
Questions
1.
What are your thoughts on the ECB’s [European Central Bank’s] current behaviour?
2.
Do you think the ECB is behaving in the right way to be able to meet the mandate again in the future?
3.
You mentioned the ECB moved away from forward guidance on its last rate hike. Do you think that could become more common and a theme in ECB behaviour?
4.
Do you think the slight move away from forward guidance could boost the confidence and credibility in the ECB after a period of not reacting to the inflationary pressures we were seeing in the eurozone?
5.
Do you think the ECB is operating with constrained discretion or using a more rules-based approach?
6.
How do you think the ECB is managing inflation expectations? Where is the market anchoring future inflation curves?
7.
What rate hike programme can you envision occurring for the ECB, perhaps for H2 2022 and the start of 2023?
8.
What rate can you see the ECB settling on, and perhaps the peak of it?
9.
Historically what I’ve seen, especially in the US, is to tame inflation you’ve had to raise rates above the rate of inflation. Obviously, there are some supply-side challenges involved here. You seem to think those will dissipate towards the end of 2022 and the start of 2023, is that correct?
10.
Obviously, the ECB is in a very challenging place. Do you think it’s being transparent enough about the struggles and situation it’s facing?
11.
Do you think transparency, or more transparency, always leads to better policy outcomes?
12.
How credible would you say the ECB is?
13.
We’ve discussed that eurozone inflation is mainly supply-driven. Do you think that’s 100% driven by negative supply shock, or is there any demand-pull inflation within that pie?
14.
What are your thoughts on the TPI [transmission protection instrument] or anti-fragmentation tool? We mentioned the inequitable transmission of monetary policy.
15.
Do you think it’s feasible for Italy to meet the conditions laid out for purchases in the interim or under a potential new government?
16.
How publicly acceptable is the TPI instrument? Surely, it leads to an incentive to almost overspend as a government, knowing you can gain support on the back end of your financing for government spending.
17.
Is the definition of unwarranted, disorderly market dynamics and serious threat to monetary transmission clear to you? If not, how do you know when the ECB will use it?
18.
What do you think the policy options are for the ECB? It obviously has a weakening euro – which is below parity with the dollar – and high inflation on the supply side, which is challenging to manage with monetary policy. What should it be doing? What scenarios do you think are plausible?
19.
How can you boost demand without stoking inflation? Is it possible?
20.
Do you think the ending of TLTROs [targeted, long-term refinancing operations] will negatively impact financial stability in the banking sector?
21.
Do you think the ECB’s core mandate is correct? Obviously, it had a review at the start of 2021 and moved away from the 2% target of inflation to average inflation targeting, where it could overshoot that target a little. Do you think that’s fair and correct?
22.
To confirm, you disagree with the ECB’s stance on looking at implementing green bonds as a way of maintaining price stability?
