ECB’s Coeure: ECB decisions on Thursday should support recovery prospects
- Mon pol stance will remain accommodative as long as needed
- Has all tools at hand to ensure smooth exit if risks to price stability should materialise
- Exit very likely to take place in environment where credit has recovered and risk receded in economy
- There could be merits in conducting longer term liquidity options
- Extending range of maturities in liquidity ops would probably go hand in hand with return to competitive auctions
- Permanent excess liquidity could distort signals of liquidity and credit risk
- Keeping liquidity overallotment permanent feature would have advantage of reducing overnight interest rate volatility
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