ECB'S Praet: Institutional environment of the ECB is weak

FXStreet (Łódź) - ECB Governing Council Member Peter Praet, who spoke as the first ECB policymaker today at the Watchers XV conference organized by the Center for Financial Studies in Frankfurt, said that "the institutional environment of the ECB is weak,” adding that “this is due to economic crisis and imbalances." Praet pointed also to the extremely weak money supply in the Eurozone.

He stressed that forward guidance proves to be a “useful tool” and that transparency could be further enhanced by providing information on the outlook and risks. Publishing ECB monetary policy meeting minutes would be “essential to making drivers of monetary policy decisions transparent,” helping to “shape expectations." Praet said however that he was not in favor of revealing the names of votes in the minutes.

“Anchoring inflation expectations is a key to the ECB's success,” Praet emphasized.

Moreover, the ECB policymaker assured that the central bank would maintain its current monetary policy due to the significant unused capacity, even if the economy improves visibly.