MNI SOURCES: ECB Retreat To Consider Strategy Review

The European Central Bank will hold its annual retreat for Governing Council members face-to-face next month, with Eurosystem sources telling MNI that discussions are likely to centre on key areas of disagreement within its monetary policy strategy review and communications.

The meeting pencilled in for June 18-20 will see central bank governors debate as yet unresolved issues, including how national central banks and the ECB should spell out the conclusions of the review, said one Eurosystem source.

Hopes the review might be published in July may be "unrealistic," a second source close to the Eurosystem said, with views on some topics "too different" to ensure an early conclusion to the process.

INFLATION TARGET

"President Lagarde intends to invite the members of the Governing Council to the ECB annual retreat, which could not have been held because of the Covid situation," an ECB spokesperson told MNI. "The pandemic situation permitting, this retreat would take place in the second half of June."

He did not comment on the agenda for the retreat, which would take place between Governing Council meetings scheduled for June 10 and July 22

The review includes a consideration of the ECB's inflation targeting strategy, with Eurosystem officials previously telling MNI that it is likely to recommend adopting a specific inflation target, rather than the current "below, but close to 2%", but also to emphasise that the central bank will treat undershooting the target as seriously as overshooting it. Differences remain, though, over how closely the ECB should reproduce the Federal Reserve's shift to average-inflation targeting, the sources said.