the euro - area economy and the recent monetary policy decisions speech by ignazio visco governor of the bank of italy giornate di economia “ marcello de cecco ” lanciano ( italy ), 28 september 2019 first of all, thank you for your kind invitation to take part in this panel on “ europe for all ” which concludes this second day of the “ giornate di economia ” in memory of marcello de cecco. marcello followed the ecb governing council ’ s decisions and the related analyses and discussions with great interest and with the acumen for which he was known. today i would like to touch upon three points : 1 ) the monetary policy decisions that we have just taken ; 2 ) the economic analyses behind them ; and 3 ) the debate concerning, and our assessment of, the effectiveness of the various measures that were adopted. 1. at its september meeting the ecb governing council introduced a very broad package of expansionary measures. it lowered the interest rate on deposits that banks make with the eurosystem ( the deposit facility ), which has been in negative territory since june 2014, by 10 basis points to - 0. 5 per cent. it decided to restart net asset purchases at a monthly pace of €20 billion beginning in november, after they were interrupted in december of last year, when they amounted to €2, 600 billion since their launch at the end of 2014. it relaxed the terms of its new series of targeted longer - term refinancing operations ( tltro iii ) compared with those of the june decision by lowering their cost ( to - 0. 5 or 0. 0 per cent depending on the lending performance of the individual banks ) and by extending their maturity ( from two to three years ). it introduced a zero interest rate, as opposed to a negative interest rate, on part of the banks ’ liquidity reserves ( “ tiering ” ) to attenuate the risk, feared by some observers, that increasingly negative interest rates on the deposit facility could have counterproductive effects on banks ’ balance sheets and, in turn, on lending. in addition, we have strengthened our forward guidance concerning the future path of monetary policy, signalling our expectation to keep the key ecb interest rates at their present or lower values until inflation gets to a level consistently close to 2 per cent over the medium term. 2. these decisions were not made in haste : they are the natural conclusion to the analyses started quite

detailed internal discussions on the monetary policy options are indispensable, and always take place. many observers have wondered whether the dissemination of comments immediately following a common decision is a practice that is counterproductive, useful or even necessary. we can debate the merits of introducing at the ecb the procedure followed by other central banks, where, following their monetary policy meetings, they publish the positions of the participants ( as well as the reasons for any disagreements ). this solution, which i personally find appropriate, was at one point considered but then rejected by the governing council. in his remarkable scientific output, as in his numerous articles for the public at large, marcello de cecco always highlighted the close ties between geopolitical issues and economic events. it is interesting today to go back and read one of his last articles published in affari e finanza at the end of 2015. it dealt with the decision adopted by the ecb governing council in december of that year to expand asset purchases. just as happened a few days ago, a member of the council had publicly expressed disagreement with that decision ; i am not sure that today the disagreement regarding the possible results of that decision would have been expressed quite so forcefully. i do not think that the comments made by some governors at the end of the governing council meeting were guided by preconceived ideas or by political considerations, as marcello seemed to think was the case back then, nor were they guided by an abstract division into “ hawks ” and “ doves ” as the press sometimes likes to believe. i am sure that these comments reflect the genuine conviction of council members about the most useful measures for the euro - area economy. however, in the institutional context of the economic and monetary union, it is still important to avoid the risk that, also due to the extemporaneous nature of the remarks made, the positions of the individual council members be interpreted as an expression of national perspectives or interests, rather than as relating to the area as a whole. for this reason, i believe we all need to work to make our decision - making process as transparent as possible.