“The ECB’s financial risk-management: Historical insights for the review of the monetary policy strategy”

Jens van ‘t Klooster presented his paper “The ECB’s financial risk-management: Historical insights for the review of the monetary policy strategy.”  From the introduction:

To deal with its new challenges in managing risk, the ECB should clarify under what conditions its objective of minimising losses is decisive and when risk management should bow to other ECB policy objectives such as financial stability and environmental sustainability. The ECB should also give up on its policy of market neutrality in favour of what I describe as a policy of “market attentiveness”. To ensure that its policy priorities are duly reflected in its operations and the broader financial markets that they shape, the ECB should expand its own internal credit rating facilities. To calibrate its priorities and clarify the status of its ambiguous mandate, the ECB should enhance coordination with the EU’s political institutions.