Interesting comments from the ECB’s Constancio. He says the ECB will focus exclusively on economic data and inflation in making monetary policy.The recovery will be slow, he goes on to say. Constancio has thrown his hat in the ring to ascend to a spot on the executive board in Frankfurt from his post at the Portuguese central bank.
At a time when the European financial system is weak, financial stability is not part of the ECB’s mandate. It would be interesting to see the bank hike before the banks get their act together. That could very well lead to a severe second leg to the financial crisis as European banks scramble for funding without the open-spigots policy that has been in place at the ECB for nearly two years.
