Christine Lagarde Gets a Heavy Pointer on Her ECB Review

The European Central Bank will spend much of this year reflecting on how to revamp its objectives and instruments to make them fit for an era of stubbornly low inflation. An ECB staff document published in December offers it much-needed guidance on the best way forward.

The mammoth 336-page document looks back at the central bank’s first 20 years of monetary policy. The authors — who include Massimo Rostagno, the respected head of the ECB’s monetary policy department — have been careful not to try to determine the outcome of Christine Lagarde’s separate policy review. The bank’s new president doesn’t want the review to be shaped by the ECB alone, preferring that it “turn each and every stone” and be open to the view of all national central banks, as well as academics and civil society. She also wants to look at broader questions, such as the role the ECB can play in fighting climate change.