ECB minutes show discussion of ‘package’ of moves, changes to guidance

Minutes of the July 25-ending European Central Bank meeting showed policymakers were receptive to a stimulus program that could include both interest-rate cuts and asset purchases. “The view was expressed that the various options should be seen as a package, i.e. a combination of instruments with significant complementarities and synergies, since experience had shown that a policy package – such as the combination of rate cuts and asset purchases – was more effective than a sequence of selective actions,” the minutes read. Members also saw value in examining ways to further strengthen its forward guidance on the path of policy rates, announcing preparatory work on the design of a tiered system or other options to mitigate the effects of negative interest rates on banks and and preparatory work “on modalities for potential new net asset purchases.”

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