So that’s it, then, until October. The latest steps in the European Central Bank’s ”exit strategy” laid out yesterday, set out how liquidity operations will be managed until the start of the fourth quarter. So will the ECB now just sit on its hands? Possibly. It certainly does not look like they are going to need to tighten monetary policy anytime soon (current market expectations are for the first hike only in the second half of 2011).
But these are turbulent times for the eurozone, and for the guardian of Europe’s single currency. Greece’s crisis may have subsided, but it has not gone away. Policymakers, including at the ECB, know they have to look at making the monetary union function more effectively. Read more