2020.03.1810:33:00UTC+00ECB Says Stands Ready To Use All Tools After Holzmann Comments

The European Central Bank came out with a statement on Wednesday to assert that it stands ready to use all its tools when needed after Austria's central bank governor Robert Holzmaan said in a interview that monetary policy may have reached its limits. "The Governing Council was unanimous in its analysis that in addition to the measures it decided on 12 March 2020, the ECB will continue to monitor closely the consequences for the economy of the spreading coronavirus and that the ECB stands ready to adjust all of its measures, as appropriate, should this be needed to safeguard liquidity conditions in the banking system and to ensure the smooth transmission of its monetary policy in all jurisdictions," the ECB said in the response to Holzmann comments.

With reference to the ECB President Christine Lagarde's comments in the post-decision press conference on March 12, Holzmann in an interview to the Der Standard news paper said the content of the communication was correct, but markets interpreted it as the central bank's refusal to expand liquidity to the expected extent. Further, the policymaker told the newspaper that Lagarde said monetary policy has reached its limits and it was primarily the task of fiscal policy to solve the problem.