ECB’s Villeroy: Optionality and Flexibility More Essential Than Ever

23 February 2022

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Wednesday said that the geopolitical situation made optionality and flexibility more important than ever for monetary policy.

In a speech at a Eurofi conference, Villeroy, who heads Banque de France, said with respect to Russian dictator Vladimir Putin’s aggression towards Ukraine, ‘We are obviously monitoring closely the geopolitical developments, and their possible economic and financial implications.’

French financial institutions had only limited direct exposure to Russia, he said, though all European banks had to be wary of cyberattacks.

 ‘We will assess in our Governing Council in March the more indirect consequences on inflation and growth, and we will be facts driven: more than ever, optionality – about the right monetary stance – and flexibility – to guarantee the right monetary transmission – are the two names of the game for our policy’, he said.