Yves Mersch: Asset price inflation and monetary policy

Keynote speech by Mr Yves Mersch, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the European Central Bank, at the celebration of INVESTAS' 60th anniversary, Luxembourg, 27 January 2020.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
28 January 2020


The outlook for euro area economic activity and inflation at present warrants the highly accommodative monetary policy implemented by the ECB through our package of policy measures. Nonetheless, the Governing Council remains attentive to the potential side effects of those measures. Monitoring and analysing those side effects is part and parcel of the Governing Council's ongoing monetary policy assessment and our recently announced strategy review.

Indeed, the prolonged period of substantial accommodation and the unconventional nature of our measures call for vigilance on the efficacy of the policy measures and might affect the strategic calibration and the appropriateness of the monetary policy stance. This vigilance is particularly warranted in the light of some signs that monetary policy is encouraging increased risk-taking and contributing to elevated asset price inflation and income inequality.