European Central Bank Governing Council member Erkki Liikanen said Tuesday that downside risks remain to the region’s growth and inflation outlooks and that the Bank stands ready to act to defend its price stability mandate if necessary.
Speaking in Finland, where he heads the country’s central bank, to lawmakers on parliament’s Commerce Committee, Liikanen also said the the ECB’s inflation target should be symmetrical and react to consumer price pressures that are both too high and too low.
“The Governing Council is willing and able to act by using all the instruments available within its mandate if warranted in order to maintain an appropriate degree of monetary accommodation,” Liikanen said in remarks published by the Bank of Finland.
“The growth and inflation outlook is still subject to downside risks,” Liikanen cautioned, but added the caveat that “monetary policy alone cannot sustain economic growth. It is important that improvements in the prospects for growth are broadly based. Structural reforms need to be continued in order to reinforce the conditions for growth.”