{
  "title": "Euro Area Policies: Selected Issues",
  "publication": "IMF Staff Country Reports, July 19, 2023",
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  "summary": "This Selected Issues paper highlights quantitative tightening (QT) by the European Central Bank (ECB). It uses evidence from the literature on the impact of central bank bond purchases and sales on bond yields, and the monetary policy stance, to outline a roadmap for reducing the Euro system’s bond",
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    {
      "heading": "Executive summary and scope",
      "content": "- This Selected Issues paper highlights quantitative tightening (QT) by the European Central Bank (ECB).\n- It uses evidence from the literature on the impact of central bank bond purchases and sales on bond yields, and the monetary policy stance, to outline a roadmap for reducing the Euro system’s bond holdings.\n- The current tightening cycle provides an opportunity to revisit the ECB’s balance sheet policy.\n- With inflation running above target, the monetary accommodation provided by the ECB’s bond holding is no longer necessary.\n- The paper concludes that the ECB’s short term policy rates should be the main choice for adapting the monetary policy stance to changing circumstances and QT should proceed in a gradual, predictable manner as outlined by the ECB."
    },
    {
      "heading": "Key findings",
      "content": "- Quantitative tightening (QT) is central to the paper’s analysis and recommendations regarding the ECB’s balance sheet policy.\n- Literature evidence is used to link central bank bond purchases and sales to bond yields and overall monetary stance.\n- The paper emphasizes that, given inflation running above target, the accommodation from the ECB’s bond holdings is no longer necessary.\n- The current tightening cycle is characterized as an opportunity to revisit and adjust the ECB’s balance sheet policy."
    },
    {
      "heading": "Policy recommendations and roadmap",
      "content": "- Primary instrument: ECB short term policy rates should be the main choice for adjusting the monetary policy stance to changing circumstances.\n- QT approach: QT should proceed in a gradual, predictable manner as outlined by the ECB.\n- Balance sheet objective: Reduce the Euro system’s bond holdings following the roadmap informed by the literature on policy impacts on yields and monetary stance."
    },
    {
      "heading": "Publication and metadata",
      "content": "- Publication date: July 19, 2023\n- Pages: 18\n- Volume: 2023\n- Issue: 265\n- Series: Country Report No. 2023/265\n- DOI: https://doi.org/10.5089/9798400248733.002\n- Stock No: 1EUREA2023002\n- ISBN: 9798400248733\n- ISSN: 1934-7685\n- Subjects: Central bank policy rate, Financial institutions, Financial services, Financial statements, International organization, Monetary policy, Monetary stance, Public financial management (PFM), Securities, Unconventional monetary policies\n- Keywords: app portfolio, bond supply net of ECB, C. Policy consideration, Central bank policy rate, ECB balance sheet, ECB Policy rate, Financial statements, Monetary stance, Securities, Unconventional monetary policies\n\nSource: International Monetary Fund, Euro Area Policies: Selected Issues, IMF Staff Country Reports No. 2023/265 (July 19, 2023).\n\n---\n\n Content in this bundle\n\n- Euro Area Policies: Selected Issues; IMF Country Report No. 23/265; June 29, 2023\n  - Euro Area Policies: Selected Issues; IMF Country Report No. 23/265; June 29, 2023 (Markdown version){rel=\"alternate\" type=\"text/markdown\"}\n  - Euro Area Policies: Selected Issues; IMF Country Report No. 23/265; June 29, 2023 (PDF){rel=\"external\" type=\"application/pdf\"}"
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    "Published: July 19, 2023",
    "Series: IMF Staff Country Reports",
    "DOI: https://doi.org/10.5089/9798400248733.002",
    "This Selected Issues paper highlights quantitative tightening (QT) by the European Central Bank (ECB).",
    "It uses evidence from the literature on the impact of central bank bond purchases and sales on bond yields, and the monetary policy stance, to outline a roadmap for reducing the Euro system’s bond holdings.",
    "The current tightening cycle provides an opportunity to revisit the ECB’s balance sheet policy.",
    "With inflation running above target, the monetary accommodation provided by the ECB’s bond holding is no longer necessary.",
    "The paper concludes that the ECB’s short term policy rates should be the main choice for adapting the monetary policy stance to changing circumstances and QT should proceed in a gradual, predictable manner as outlined by the ECB.",
    "Quantitative tightening (QT) is central to the paper’s analysis and recommendations regarding the ECB’s balance sheet policy.",
    "Literature evidence is used to link central bank bond purchases and sales to bond yields and overall monetary stance.",
    "The paper emphasizes that, given inflation running above target, the accommodation from the ECB’s bond holdings is no longer necessary.",
    "The current tightening cycle is characterized as an opportunity to revisit and adjust the ECB’s balance sheet policy.",
    "Primary instrument: ECB short term policy rates should be the main choice for adjusting the monetary policy stance to changing circumstances.",
    "QT approach: QT should proceed in a gradual, predictable manner as outlined by the ECB.",
    "Balance sheet objective: Reduce the Euro system’s bond holdings following the roadmap informed by the literature on policy impacts on yields and monetary stance.",
    "Publication date: July 19, 2023",
    "Pages: 18",
    "Volume: 2023",
    "Issue: 265",
    "Series: Country Report No. 2023/265",
    "DOI: https://doi.org/10.5089/9798400248733.002",
    "Stock No: 1EUREA2023002",
    "ISBN: 9798400248733",
    "ISSN: 1934-7685",
    "Subjects: Central bank policy rate, Financial institutions, Financial services, Financial statements, International organization, Monetary policy, Monetary stance, Public financial management (PFM), Securities, Unconventional monetary policies",
    "Keywords: app portfolio, bond supply net of ECB, C. Policy consideration, Central bank policy rate, ECB balance sheet, ECB Policy rate, Financial statements, Monetary stance, Securities, Unconventional monetary policies",
    "**Euro Area Policies: Selected Issues; IMF Country Report No. 23/265; June 29, 2023**"
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