ECB’s Orphanides: Dealing with an extreme episode of financial instability and a truly globalised economic downturn

ECB’s Orphanides feels central banks are dealing with a period of extreme financial turbulance and an economic downturn on a global scale.

The official didn’t mention the outlook for the euro zone economy or monetary policy in the text of a speech to be delivered in Oslo which deals with central banks’ experience with inflation fighting.

Orphanides says inflation targetting was an effective way of achieving price stability but not the only way, noting that although the ECB had price stability as it’s primary goal, it did not have a formal inflation target.

The text reads “With the success of inflation targetting and other frameworks in maintaining price stability, new challenges have appeared” adding “At present we are dealing with an extreme episode of financial instability and a truly globalised economic downturn.”