ECB Should Take Cautious Approach in Calibrating Monetary Policy, Visco Says

5 July 2023

By Xavier D’Arcy – FRANKFURT (Econostream) – The European Central Bank will need to exercise caution in its calibration of monetary policy, ECB Governing Council member Ignazio Visco said on Wednesday.

In a speech at the Annual Assembly of the Italian Banking Association in Rome, Visco, who heads the Bank of Italy, said that ‘in the face of a significant tightening of financing conditions and a strong weakening of credit, caution must be exercised to avoid undesired repercussions on economic activity, financial stability and medium-term price stability.’

‘Now that interest rates are in restrictive territory, calibrating the duration of the monetary tightening, rather than excessively increasing its magnitude, would have the advantage of facilitating a more informed analysis of the effects of the actions taken so far’, he added.