Monetary policy risks becoming ineffective in zero bound rate environment: ECB’s Coeure

By FXStreet FXStreet (Mumbai) – ECB executive board member Benoit Coeure in a speech delivered at a lecture in Berkley, California on Saturday and published today, noted that traditional monetary policy measures have failed in a new zero lower bound environment across the globe.

Key Quotes:

“We lack a clear vision of the combination of demand and supply side policies, and the broader design of the global economy, which will support growth beyond the short-term impulse provided by fiscal or monetary policy at the individual country level.”

“The capacity of the global economy to generate growth is under question,”

“In a global zero lower bound environment, surplus countries hold world output down.”

“If we ignore those issues, there is a risk that monetary policies may become ineffective, overburdened, and/or collectively trapped in a suboptimal equilibrium.”
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Source:: FX Street