FRANKFURT (MNI) – The European Central Bank should concentrate on
satisfying its mandate to ensure price stability in the Eurozone,
European Central Bank Executive Board member Juergen Stark said Friday.
In remarks at the “ECB And Its Watchers Conference,” a text of
which was provided in advance, Stark defended his institution’s monetary
pillar but steered clear of comments on current economic developments.
The ECB’s monetary analysis is appreciated in the context of
current financial stability issues, but whereas the ECB had earlier been
asked to incorporate monetary data in an inflation forecast, “now we are
being asked to plug it into the emerging framework for macro-prudential
analysis,” he said.
“As a by-product, monetary analysis may both help and be helped by
the analysis of bank balance sheets for macro-prudential purposes,” he
said. “However, we do not want to limit monetary analysis to this end.
We need to maintain a comprehensive view of the transmission of money to
the economy and to focus on pursuing price stability, in line with our
mandate.”
The commitment to conducting a monetary analysis “disciplines
decision-making,” ensures that inflation risks are evaluated in the
context of comprehensive information, and “compels policymakers to
consider trends in money and credit growth, which may exert an influence
on price developments beyond that identified by a purely conjunctural or
output-gap view of the world,” Stark said.
–Frankfurt bureau tel.: +49-69-720142. Email: dbarwick@marketnews.com
[TOPICS: M$X$$$,M$$EC$,MT$$$$,M$$CR$]
