Guest lecture by Philip R. Lane, Member of the Executive Board of the ECB, at Stanford Graduate School of Business

Stanford, 2 May 2024

Introduction

My aim today is to review the ECB’s monetary policy tightening cycle.^[1] The tightening began in December 2021 with the announcement of the end date for our net purchases under the pandemic emergency purchase programme (PEPP), as well as the recalibration and subsequent phase-out of our targeted lending programme. After concluding net purchases under the PEPP in March 2022 and net purchases under the asset purchase programme (APP) in June 2022, we subsequently normalised our policy rate (the deposit facility rate [DFR] in conditions of abundant excess liquidity) from -0.5 per cent to 2 per cent in the second half of 2022, before raising rates further into restrictive territory during the first nine months of 2023 to a level of 4.0 per cent. We have held the DFR constant at this level over the last five meetings since our last hike in…