Monetary policy has been successful in stabilizing the euro area economy, yet there is still the need for patience and persistence, and a close monitoring of risks, European Central Bank Executive Board Member and Chief Economist Peter Praet said Tuesday.
“Monetary policy has been effective in stabilizing the euro area economy and creating conditions for a sustained adjustment of inflation towards below, but close to, 2 percent over the medium term,” Praet said in a speech in Cologne, Germany.
The policymaker attributed the achievement to fundamental changes in banking regulation and supervision.
“Patient, prudent and persistent monetary policy is still needed,” Praet said.
“At the same time and in particular at this stage of the monetary policy cycle the risk channel of our policy has to be closely monitored.”
While macroprudential instruments were rightly activated in a number of instances, Praet said, the full implementation of the regulatory reforms remains essential.