ECB’s Vasle: Risks to Persist Amid Monetary Policy Easing

31 May 2024

By Aurėja Bobelytė – VILNIUS (Econostream) – As monetary policy easing looms ever larger, risks to the economy remain, European Central Bank Governing Council member Boštjan Vasle said Monday.

In an editorial in the international edition of Slovenian monthly journal for money and banking Bančni Vestnik, Vasle, who heads the Bank of Slovenia, said, ‘While inflation in the euro area is steadily approaching our target and as we are contemplating the start of a gradual reduction in our policy rates, the prospect of achieving a soft landing is globally becoming increasingly promising. However, uncertainties and risks persist’.

According to Vasle, the main uncertainties were associated with geopolitical risks, exuberance in asset markets and the lingering effects of past monetary policy tightening.

Opportunities offered by digitalisation, the green transition, climate change and fragmentation of trade also posed risks, he said, emphasising the need to ‘generate an environment, where we would be able to operate successfully despite increased uncertainty and more frequent shocks’.

‘After years of operating in crisis mode, it is time to come to terms with higher uncertainty and devote more attention to structural challenges that have taken a back seat in recent years’, he said.