The 25th anniversary ECB Symposium

Nout Wellink

Nout Wellink – as former DNB President and former member of the Governing Council of the ECB, a critical discussion of the ECB’s shift in interpretation of price stability and miscalculation of the recent inflation; the use of non-conventional instruments including large asset purchase programs of which the losses at DNB are now becoming very large and visible. Dr. Wellink also discusses how the new role of the ECB in banking supervision sits with its traditional mandate to maintain price stability.

Mary Pieterse-Bloem

Mary Pieterse-Bloem – as Professor in Financial Markets she and Prof Eijffinger studied Eurozone government bond spreads. These spreads are after 2012/2013 well explained by market risk-based factors, and our specification is robust for earlier periods. When we add EMU specific factors, it is shown that Target2 balances reduce spread as they increase convertibility risk costs until 2012/2013, and that the ECB’s asset purchases subsequently reduce spreads, especially in the periphery. The break between these two periods coincides with an alteration of policy over two sets of Presidencies: Duisenberg – Trichet in the first period and Draghi-Lagarde in the second. Their paper was published as a CEPR Discussion Paper (DP17533), and summarized in a VoxEU Column.

Jakob De Haan

Jakob De Haan – former Head of Research at DNB (2009 – 2020) who together with Prof Lex Hoogduin looked into ECB communications on monetary policy, also in comparison to the US Federal Reserve. It is clear that central bank communication has evolved into an important instrument in central banks’ toolkit. Zooming in on what has probably become the most important communication device, namely forward guidance, they conclude that initially the ECB’s forward guidance was open ended. Through various experiences, the ECB announced in July that it would no longer provide forward guidance on interest rate decisions.

Discussion

Following the paper presentation, a lively discussion followed by the participants, on the mandate of the ECB, and whether with its latest instrument, the TPI, this central bank has essentially become a fiscal authority.

Journal of International Money and Finance

As of now a paper by Nout Wellink "Crises have shaped the European Central Bank" has been featured in the Journal of International Money and Finance as the first article in a special series. You can read it here.