The European Central Bank has taken a big step towards ending its crisis-era economic stimulus measures, dropping an explicit commitment to expand its bond-buying programme if the eurozone expansion sputters.
As is often the case with the ECB, the important policy shift was couched in a minor change in wording in its post-governing council meeting statement yesterday, where it took out a vow to intervene more aggressively in bond markets should growth disappoint.
But the change in its “easing bias” marked one of the final steps Mario Draghi, ECB president, must go through before winding up a programme launched three years ago as the eurozone struggled to recover from its catastrophic debt crisis. It also comes amid a global effort by central banks to return to pre-crisis policymaking, a shift that has unnerved financial markets accustomed to years of massive emergency stimulus from the ECB, US Federal Reserve and Bank of Japan.