FRANKFURT (Reuters) -The European Central Bank set a new inflation target on Thursday and carved out a major role in the fight against climate change, as Europe’s most powerful financial institution embarked on the biggest policy overhaul in its 23-year history.
Following are highlights of ECB President Christine Lagarde’s comments at a news conference
2%, BUT DEVIATIONS OK
“We know that 2% is not going to be constantly on target, there might be some moderate, temporary deviation in either direction of that 2%. And that is OK. What we are very concerned about is any sustainable, durable, signficant deviation from the target.”
RATES FIRST, TOOLS NEXT
“The key – and first and foremost – instruments that we will use are the ECB interest rates. But we also acknowledge that in circumstances such as the one we are operating in now the other tools that we have used successfully over the last 10 years are necessary tools to respond to the possible adverse shock that we are facing.
“All tools – by that we mean forward guidance, the asset purchase programmes, the TLTRO and the negative rates – are necessary tools that will remain in the toolbox that we will be able to use if needed.”
CLIMATE CHANGE
“Climate change is the major challenge that the world is facing. We are not the primary actors, we are not driving the bus if you will, but we are on that bus and we have to look at whether or not, under our mandate, it has an impact on price stability.”
(Compiled by Hugh Lawson)
