benoit cœure : interview in alternatives economiques interview with mr benoit cœure, member of the executive board of the european central bank, in alternatives economiques, conducted by ms sandra moatti and published in the may 2015 issue of the magazine. * * * there is a great deal of discussion about the effects of qe. what can you hope to achieve when long - term yields are already extremely low? within the euro area, the transmission channel that is almost the most important in my view is confidence. confidence that the ecb will take its mandate to keep inflation below, but close to, 2 % seriously. before we took this step there had been doubts about the willingness of the ecb to respect its mandate. but it was the only substantive measure possible in the circumstances ; we had run out of conventional measures because the scope to lower key rates had been exhausted. the second channel is to lower borrowing costs, which aren ’ t negligible for companies and households. the policies combating fragmentation in the euro area have borne fruit ; now when interest rates for government borrowing fall it has a noticeable effect on corporate borrowing costs across the euro area – which was not the case even two years ago. that ’ s essential if investment is to recover. sure, rates are already low, but since qe was announced and implemented at the start of march long and very long - term interest rates have fallen significantly in all countries, including germany and france, and even more in spain, italy and those most affected by the crisis, such as ireland and portugal. the third channel works through portfolio rebalancing : it ’ s still too soon to assess that. bank and non - bank investors who sell us their securities have a very strong incentive to invest elsewhere rather than leave their money doing nothing, with deposits at the ecb costing – 0. 20 % p. a. the sharp upturn in the real economy should encourage them to lend more to business. in that sense, the time is right : the impact of qe is being felt just as the recovery is being confirmed, and it will reinforce it. it ’ s a mechanism that is potentially powerful. the final channel, of course, is the exchange rate : this is not an objective in itself, but it reflects market participants ’ expectations of the different monetary policies being pursued on each side of the atlantic. if you include the oil price too, you have a combination of factors favouring recovery and investment

different stages in the monetary policy process does not correspond to how the forecasting and policy - making work is carried out since the new repo rate path was introduced. in their view, the changes have meant that, in practice, the actual interest rate decision has been brought forward. they therefore recommend that the riksbank should announce the monetary policy decision and bis central bankers ’ speeches interest rate path earlier, namely directly after the meeting of the executive board that is held a couple of days after the second monetary policy group meeting. however, we consider this proposal to be difficult to implement. although the analyses and forecasts are largely complete by the second monetary policy group meeting, the monetary policy decision is made at the monetary policy meeting and not before then. any reservations against the decision are put forward at this meeting, too, and not earlier. in conclusion, let me once again thank professors goodhart and rochet for their valuable contribution to our continued work on both monetary policy and financial stability. we will have many opportunities during the course of this work to discuss with the committee on finance how we can develop and improve our analyses. bis central bankers ’ speeches