Fabio Panetta: Asymmetric risks, asymmetric reaction - monetary policy in the pandemic

Speech by Mr Fabio Panetta, Member of the Executive Board of the European Central Bank, at the meeting of the ECB Money Market Contact Group, Frankfurt am Main, 22 September 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

It is a pleasure to speak to the Money Market Contact Group today.

Money markets and central banks have an important relationship which, when it is working well, makes monetary policy more effective. Money market prices reflect expectations of our policy and the understanding of our reaction function. They are the first stage in the transmission of our policies to financing conditions for the real economy.

So I am pleased to talk to you today about how I see current issues related to monetary policy - and to hear your views in return.

The ECB's policy response to the coronavirus (COVID-19) crisis

In pursuing our price stability mandate, our policy response to the crisis had three goals. The first was to counter the downward impact of the pandemic on the projected path of inflation.