MNI BRIEF: Delay As ECB Framework Review To Report Next Spring
Results of ECB's comprehensive internal exercise looking at policy transmission had been expected to be announced by the end of this year.
A review due to report by year-end into the European Central Bank's operational framework has now been pushed back into 2024, President Christine Lagarde told a hearing of the European Parliament in Brussels on Monday.
"We are conducting a comprehensive review of the operational framework for steering short-term interest rates, assessing the costs and benefits of alternative regimes," Lagarde said. "We aim to conclude this review by spring 2024 and we will of course report to this Committee on the outcome."
Eurosystem staff are analysing the optimal size and composition of the ECB's balance sheet -- and by implication the adequate level of excess liquidity -- at the same time as it faces criticism for making large interest payments to banks as a result of rising rates.
Lagarde initially announced the review in December 2022, saying it would provide information regarding the endpoint of the balance sheet normalisation process "by the end of 2023".