ECB delivers bold measures but sees the ball primarily in the field of fiscal policy
- Today the ECB delivered a comprehensive policy package consisting of additional LTROs,
TLTRO III targeting SMEs, a temporary increase of QE by cumulatively € 120 bn skewed
towards CSPP until year-end and some regulatory easing for banks. It refrained from cutting
the deposit rate.
- The Covid-19 shock is seen as temporary and monetary policy makers look for a V-shaped
development, while seeing the risks clearly tilted to the downside.
- The Governing Council, however, sees the ball for supporting measures in the field of
governments and urged for “ambitious and coordinated fiscal policy response”.
- Looking ahead, only in case of a longer lasting crisis the ECB would probably think about
additional policy measures.