Central Banks
ECB Unveils Policy Revamp, Locking In Floor System for Rates
- Officials present results of operational framework review
- Announcement doesn’t affect plans to lower interest rates
The ECB headquarters in Frankfurt.
Photographer: Alex Kraus/BloombergThis article is for subscribers only.
The European Central Bank presented a new framework for how it implements monetary policy, preserving the current system of steering interest rates while giving lenders more of a say over how much cash they need to operate.
The revamp of the plumbing that underpins the ECB’s key task of maintaining stable prices in the 20-nation euro zone will see banks decide how much liquidity they need from the Frankfurt-based institution on top of what’s provided through a new permanent portfolio of bonds.