yves mersch : monetary policy in the euro area - solid expansion with timid price pressure contribution by mr yves mersch, member of the executive board of the european central bank, to the eurofi magazine, submitted on 21 march 2018 and published on 26 april 2018. * * * the euro area economy currently is solidly expanding and the upswing is broad - based. recent data indicate that in the near term the economy is likely to expand even faster than had been expected. the monetary policy measures introduced since 2014 have effectively supported growth and employment, with real gdp growth expected to remain consistently above potential growth in the coming years. in spite of the favourable growth dynamics, underlying inflation continues to be subdued. while our policy measures have been successful in preventing the disinflation of 2014 from spiralling into deflation and are contributing to an improved inflation outlook, an ample degree of monetary accommodation remains necessary to secure a return of inflation rates towards levels that are below, but close to, 2 % over the medium term. looking ahead, the evolution of monetary policy will be firmly guided by the outlook for price stability. in this regard, the transition towards policy normalisation will begin once the governing council assesses that there has been a sustained adjustment in the path of inflation. such a judgement will be based on three criteria for inflation : convergence, confidence and resilience. convergence implies that headline inflation will need to be on track to reach levels below, but close to, 2 % within a medium - term horizon. the governing council will also need to have confidence that the upward adjustment in inflation has a high enough probability of materialising and that it can do so on a sustainable basis. thirdly, resilience, it will need to be ensured that the sustained adjustment in the path of inflation will be maintained even without additional net asset purchases. in fact, confidence has recently risen and convergence is being confirmed – partly because the temporary decline in the inflation rate has been weaker than our internal calculations had predicted when we had reduced the purchasing program from eur 60 billion to eur 30 billion. more resilience will follow eventually. still, patience and persistence with respect to our monetary policy is required. the former is necessary as it takes time for price pressures to build - up and the latter reflects the fact that the pick - up in inflation still needs to be supported by the prevailing monetary policy stance. once the governing council judges that progress towards meeting the three criteria is sufficiently advanced, our net asset purchases

benoit cœure : central bank communication in a low interest rate environment speech by mr benoit cœure, member of the executive board of the european central bank, at an event organised by bruegel, brussels, 31 march 2017. * * * it is a great pleasure to be here today at bruegel, a think tank that has always been at the forefront of the policy debate in europe, and i am grateful for the opportunity to contribute to the discussion in this forum. 1 today, i would like to share with you a few thoughts on central bank communication in a low interest rate environment. in particular, i will discuss, drawing on the ecb ’ s experience, the communication challenges central banks face when rates are negative and when there is uncertainty on the reaction function of policymakers. i will conclude with some remarks on the current policy debate. let me start on a more general note, however. the relationship of central banks with the outside world has evolved over the years. from a starting point of near - complete secrecy, central banks have come all the way to using communication explicitly as a tool of monetary policy. 2 especially during the financial crisis, the communication efforts of central banks around the world expanded. there are good reasons for this. to fulfil their mandates, central banks have injected large amounts of monetary stimulus, while also making use of novel instruments. the monetary policy response has been unprecedented in both scale and scope. this has certainly added further impetus to central banks ’ drive for accountability and transparency – something that we at the ecb have always taken very seriously. earlier this week, at an event organised by transparency international, also here in brussels, i explained in more detail how the ecb goes about fulfilling its accountability and transparency duties. 3 today, i will not discuss these institutional factors. rather, i will focus on the functional dimension behind the increased importance of communication for central banks. this functional dimension derives from the relationship between the monetary authority and financial markets. central bank communication as a tool for monetary policy in today ’ s economy, the transmission of monetary impulses starts with asset prices. a transparent policy framework greatly enhances our ability to steer financial conditions and, hence, ultimately ensures the effective transmission of monetary policy in the pursuit of our price stability objective. the relationship between central banks ’ policy communication and financial market conditions received even greater attention when central banks were approaching interest rate levels that were generally judged to offer limited or no further room for manoeuvre.