This easing has been broadly appropriate and, in some cases, indeed even more may be needed. But it is extremely important that the monetary authorities keep their eyes firmly on the economic horizon. By concentrating on developments 18 to 24 months ahead, not only will they ensure that the critical medium-term objectives are met, but the short-term needs of the economy are also addressed.
While perhaps seeming appealing at first glance, such an initiative does not seem very convincing when scrutinised more closely. The purpose of the ECB’s collateral policy is to ensure sufficient availability of collateral to allow a smooth implementation of monetary policy and to protect the Eurosystem in its financial operations. Using the framework for alternative purposes would be contrary to the ECB’s mandate.