The European Central Bank (ECB) believes the euro zone economy has built greater resilience to economic shocks, allowing for easier interest rate increases without fear of financial stress, according to ECB President Christine Lagarde.
Economic Resilience
This resilience is attributed to the ECB’s improved toolbox, the enhanced financial architecture of the euro zone, and various other instruments, such as joint bank supervision. As a result, the ECB may find itself in an intermediate zone, where it can choose to either look past or react to economic shocks.
The bank has invested heavily in improving its projections, which have proven reliable over the past few months. The ECB also uses advances in data to get a real-time picture of economic and price developments, allowing it to continually cross-check its forecasts against incoming data.
Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.
