Central Banks
ECB May Keep Bond Portfolio in New Framework, Lagarde Says
- Balance sheet will probably be smaller than it is today
- Asset holdings may be combined with lending operations
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The European Central Bank will probably keep relying on bond holdings under a future policy framework that officials are due to finalize in the coming months, President Christine Lagarde said.
“As the volume of liquidity declines over the course of time, we will arrive at the stage where we will have to decide how much liquidity is needed, what interest rate will be used as the anchor interest rate and what mechanism we use in order to steer the interest rate,” she told lawmakers in the European Parliament.