MNI BRIEF: ECB Not Focused Solely On Sovereign Yields: Lane

The European Central Bank will recalibrate its policy tools to ensure favorable financing conditions and the Governing Council will look at a range of indicators, not just sovereign yields, Chief Economist Philip lane told Les Echos in a wide-ranging interview published Monday. When we look at financing conditions 'we also look at the credit margins applied to small and medium-sized enterprises, large corporates and households,' he said.

On ending PEPP, Lane said certain factors would be needed before termination, including the virus no longer interrupting normal economic activity, then the recovery and inflation dynamics.

Europe as a whole needs to ensure fiscal policies are 'sufficiently responsive' in 2021 and it is for government policymakers to take the lead, he added, noting that not too much attention should be paid to 'short delays' in finalizing Next Generation EU plans. A vaccine is undoubtedly a great advance, Lane says, but notes the eventual effective roll-out will be in line with the ECB's May base line scenario that posited a mid-2021 assumption of a vaccine or therapeutic solution to Covid-19.