ECB throttles bond purchases faster than planned

Christine Lagarde

When making statements, the President of the ECB must always ensure that the risk premiums on the yields on government bonds of more heavily indebted countries do not rise too much.

(Photo: Bloomberg)

Frankfurt Despite the uncertainties caused by the Ukraine war, the European Central Bank (ECB) has managed to change its monetary policy: It wants to scale back its billion-euro bond purchases more quickly and phase them out completely in the summer, should the situation allow.

However, the decision was preceded by an intensive debate, as ECB President Christine Lagarde admitted on Thursday after the Council meeting: “Some members did not want us to decide anything in view of the great uncertainty. Others wanted us to make unconditional decisions despite the uncertainty.”

The compromise that has now been announced apparently goes back to chief economist Philip Lane. This is otherwise actually considered a “dove”, i.e. a representative of a soft monetary policy. Sometimes the – professionally highly respected – economist was dubbed the “super pigeon”.

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