European bank to launch first review in 16 years

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President Christine Lagarde of the European Central Bank (ECB) is set to formally launch a major review of the bank’s monetary operations, paving way for a year of far-reaching change at the Frankfurt-based bank.

In addition to setting out details of the ECB’s first strategic review in 16 years, Lagarde is expected to brief newsmen about the bank’s rate-setting council’s intentions to continue its ultra-loose monetary policy for the foreseeable future.

The policy includes keeping the bank’s benchmark refinancing rate at a historic low of zero and maintaining its new bond-buying programme at 20 billion euros (or 22.2 billion euros) a month.

The eurozone inflation rate picked up to 1.3 per cent in December but was still well below the ECB’s target of an annual inflation rate of just under 2 per cent, which it has regularly missed since 2003.

“We expect the ECB to keep its monetary policy unchanged, without sending any fresh signals concerning its future course of actions,” she said.

The ECB was founded in 1998, one year ahead of the euro currency’s launch.

The former head of the International Monetary Fund (IMF), Lagarde had already signaled plans to review the ECB, adding that the bank planned to “turn over every stone” in the examination of its policy and instruments.

She added that ECB’s inflation target would be at the core and centre of the review.

However, the examination was also expected to include an analysis of issues such as technological change and inequality, as well as steps for backing projects that address global warming.

The review is due to be completed by the end of 2020.

Suzan O