By Marta Vilar – WASHINGTON (Econostream) – European Central Bank Executive Board member Philip Lane said on Thursday that only when the ECB has run out of space using its policy rates should it use its other tools .
In a speech at the Peterson Institute in Washington, Lane said that ‘away from the lower bound we are conventional.’
Most of the ECB’s tools besides interest rates were to be used when rates were in the lower bound or in episodes of market turmoil, according to Lane.
‘Agility and flexibility in the ECB’s tools is very important’, he said.
The previous strategy review had an ‘excessive focus’ on the baseline scenario, he said.
The ECB should make sure that risk and uncertainty are taken into account, without being fixated on the baseline scenario, he said.
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