ECB’s Governing Council's new monetary policy strategy
The Governing Council of the European Central Bank (ECB) has published its new monetary policy strategy on 8 July 2021.
- New strategy adopts symmetric 2% inflation target over medium term
- Governing Council confirms that HICP remains appropriate price measure and recommends inclusion of owner-occupied housing over time
- New monetary policy strategy is result of thorough review launched in January 2020
- Governing Council approves ambitious climate change action plan
Read more about the new monetary policy strategy in the ECB's press release and in the monetary policy strategy statement.
On 23 January 2020, the Governing Council of the European Central Bank (ECB) launched a review of its monetary policy strategy. The monetary policy strategy was adopted in 1998 and some of its elements were clarified in 2003.
Since 2003 the euro area and the world economy have been undergoing profound structural changes. Slowing productivity growth, an ageing population and the legacy of the financial crisis have driven interest rates down, reducing the scope for the ECB and other central banks to ease monetary policy by conventional instruments in the face of adverse cyclical developments. In addition, inflation and inflation expectations have fallen below the ECB’s price stability target. The threat to environmental sustainability, rapid digitalisation, globalisation and evolving financial structures have further transformed the environment in which monetary policy operates, including the dynamics of inflation.
The monetary policy strategy review will encompass the formulation of price stability, the monetary policy toolkit and its effectiveness, economic and monetary analyses and the ECB’s communication practices. Other considerations, such as financial stability, globalisation, employment and environmental sustainability, will also be part of the review.
The process is expected to be concluded by the middle of 2021.
The review will be based on thorough analysis and open minds, engaging with all stakeholders.
Releases and news
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European Central Bank renews its monetary policy strategy -
ECB Press Conference 08.07.2021: Opening remarks -
The ECB’s monetary policy strategy statement -
ECB presents action plan to include climate change considerations in its monetary policy strategy -
ECB’s Governing Council approves its new monetary policy strategy
Bank of Finland’s listening events and other events related to the strategy review
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Bank of Finland speeches
The Bank of Finland listens and discusses: webinars
- New Challenges to Monetary Policy Strategies. Tuesday, 24 November 2020. Webinar video (YouTube)
- The Bank of Finland listens and discusses: Webinar on the monetary policy strategy review for climate and environmental influencers, 13 November 2020 (in Finnish)
- The Bank of Finland listens and discusses: Governor Olli Rehn’s dialogue event with students, 9 October 2020 (in Finnish)
- The Bank of Finland listens and discusses: Webinar on the ECB strategy review, 2 October 2020 (in Finnish)
Bank of Finland’s research publications
- D'Acunto, Francesco ; Hoang, Daniel ; Paloviita, Maritta ; Weber, Michael
Effective Policy Communication : Targets versus Instruments 10.11.2020
Bank of Finland Research Discussion Papers 17/2020 - Kortela, Tomi; Nelimarkka, Jaakko
The effects of conventional and unconventional monetary policy : identification through the yield curve 22.1.2020
Bank of Finland Research Discussion Papers 3/2020 - D'Acunto, Francesco; Hoang, Daniel; Paloviita, Maritta; Weber, Michael
IQ, Expectations, and Choice 18.1.2019
Bank of Finland Research Discussion Papers 2/2019 - Haavio, Markus; Jalasjoki, Pirkka; Kilponen, Juha; Paloviita, Maritta
What does "below, but close to, two per cent" mean? Assessing the ECB's reaction function with real time data
Forthcoming: International Journal of Central Banking, 2019 - Juselius,Mikael; Borio, Claudio; Disyatat, Piti; Drehmann, Mathias
Monetary Policy, the Financial Cycle, and Ultra-Low Interest Rates
Published: International Journal of Central Banking, 13, 4 ; September, 2017, 55-89 - D'Acunto, Francesco; Hoang, Daniel; Paloviita, Maritta; Weber, Michael
Cognitive Abilities and Inflation Expectations
Published: AEA Papers and Proceedings, 109, May, 2019, 562-566 - Silvo, Aino
The interaction of monetary and macroprudential policies
Published: Journal of Money, Credit and Banking, 51, 4 (June), 2019, 859-894 - Gibbs, Christopher G.; McClung, Nigel
Does my model predict a forward guidance puzzle? 10.9.2019
Bank of Finland Research Discussion Papers 19/2019 - McClung, Nigel
The power of forward guidance and the fiscal theory of the price level 29.10.2018
Bank of Finland Research Discussion Papers 21/2018
Forthcoming: International Journal of Central Banking - Schmöller, Michaela; Spitzer, Martin
Endogenous TFP, business cycle persistence and the productivity slowdown 18.9.2019
Bank of Finland Research Discussion Papers 21/2019 - Drehmann, Mathias; Juselius, Mikael; Korinek, Anton
Going with the flows : New borrowing, debt service and the transmission of credit booms 24.4.2018
Bank of Finland Research Discussion Papers 10/2018 - Stanisławska, Ewa; Paloviita, Maritta; Łyziak, Tomasz
Assessing reliability of aggregated inflation views in the European Commission consumer survey 5.7.2019
Bank of Finland Research Discussion Papers 10/2019 - Laine, Olli-Matti
The effect of TLTRO-II on bank lending 8.4.2019
Bank of Finland Research Discussion Papers 7/2019 - Lintunen, Jussi; Vilmi, Lauri
On optimal emission control : Taxes, substitution and business cycles. 8.10.2013
Bank of Finland Research Discussion Papers 24/2013 -
Claudio Borio, Piti Disyatat, Mikael Juselius and Phurichai Rungcharoenkitkul
Why so low for so long? A long-term view of real interest rates
BIS Working Papers No 685, 19 December 2017