Why can’t the ECB be more like the Federal Reserve… or the Bank of Japan, for that matter? Why can’t the ECB engage in quantitative easing or have an employment target? Those who make these calls must first consider the very different institutional set-up in which we operate. The ECB can only take measures that are consistent with its mandate.
Our primary objective is price stability, we do not have the wide mandate which for example the Federal Reserve has. Second, the structure of the financial market in Europe is very different. In the US, for example, a large share of financial intermediation takes place through capital markets. This provides a broad and deep pool of assets to purchase.