By Marta Vilar – MADRID (Econostream) – European Central Bank Governing Council member Olaf Sleijpen on Friday acknowledged the limited long-term impact of past quantitative easing while emphasizing that anchored inflation expectations remain the definitive metric of ECB policy credibility.

In a speech at the Centrale Bank van Suriname in the capital city Paramaribo, Sleijpen, who heads De Nederlandsche Bank, said that the ECB’s pursuit of price stability had faced repeated hurdles, highlighting the institution's prior shift toward "unorthodox quantitative easing" when inflation remained depressed below target.

He said this policy “was not without controversy,” and that it had “proven to be of limited effectiveness,” adding that inflation skyrocketed after the Covid pandemic.

Central bank independence bolstered monetary policy credibility, he said, which led to lower inflation without sacrificing economic expansion.

“But the real test for the credibility of a central bank is long-term inflation expectations,” he said, noting that in recent years these had been “more or less in line with the inflation target of the ECB.”

Sleijpen also warned against recent domestic political pushback against central bank autonomy across several jurisdictions, labeling the trend "dangerous for the economy" because it erodes institutional credibility and directly weakens policy efficacy.

 

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