Questions and Answers on Twitter

Frank Elderson, a Member of the Executive Board of the ECB, conducted an interview on Twitter on March 16, 2021. During the interview, Elderson addressed various topics and answered questions from the public. One question raised was about the potential negative consequences of ECB policies, to which Elderson acknowledged that while their policies are effective, they are aware of possible side effects and have taken steps to mitigate them. Another question focused on how the ECB evaluates and quantifies climate risk associated with its investment portfolio. Elderson explained that the Eurosystem is working on measuring greenhouse gas emissions and other sustainable investment-related metrics using specialized data providers. In terms of inflation, Elderson stated that while inflation has increased in recent months, it is mainly due to transitory factors, and underlying inflation remains subdued due to weak demand and economic slack. Elderson also addressed concerns about the ECB’s massive stimulus potentially leading to the zombification of the EU economy. He stated that the risk of zombification is less pronounced in this pandemic compared to previous downturns, and the share of zombie companies in the euro area has actually declined since 2014. Elderson expressed pride in his family and his commitment to helping improve the lives of Europeans during the pandemic. Regarding interest rates, Elderson reiterated the ECB’s forward guidance, stating that they expect rates to stay at their present level or lower until inflation reaches their objective of close to, but below, 2 percent. Elderson also discussed the ECB’s stance on crypto-assets, highlighting their volatility and lack of intrinsic value, and emphasized the potential benefits of a digital euro backed by the ECB. The interview also touched on topics such as climate change, inflation, inequality, and market neutrality, with Elderson providing insights and clarifications on the ECB’s approach and priorities.

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