Policy Of Targeting 'Monetary Transmission' By The ECB
Sober Look | Aug 30, 2012 02:16AM ET
Here is a quick look at the concept of "monetary transmission" that has basically become the catch phrase to justify periphery bond buying by the ECB.
MNI: Joerg Asmussen [member of the ECB's Executive Board] said the ECB's new bond-buying plan will aim to improve monetary policy transmission that is severely hampered. Currently "monetary signals, like we for example set with the July interest rate cut, filter through to the real economy either unevenly or not at all."
The lack of rate transmission is clear. Portugal's rates for consumer loans for example have remained stubbornly high (RTT : "It will remain independent. And it will always act within the limits of its mandate...yet it should be understood that fulfilling our mandate sometimes requires us to go beyond standard monetary policy tools."
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