The ECB goes for indexation

Jean-Claude Trichet, European Central Bank president, has just announced the next – and last – offer of unlimited 12-month liquidity will be at an interest rate linked to future changes in the main policy rate. I blogged on the attractiveness of such a move yesterday. Mr Trichet insisted the move sent no signals about a future tightening of monetary policy. More on ft.com later…

Related posts:

(1) The separation principle (Dec 4): does the ECB’s move towards the exit signal a return to inflation-targeted monetary policy?

(2) Indexation, explained (Dec 3): how it will work

(3) An ECB puzzle (Nov 6): leaving rates unchanged on 12-month loans could be seen as loosening, because rates are expected to rise in that period; raising rates, however, could be seen as tightening. Indexation would be a smart move

(4) Other posts on the ECB

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