Washington, D.C., March 11, 2015 - As the European Central Bank begins asset purchases under an expanded quantitative easing program, the IIF has developed a new "Draghi Dashboard" to assess the success of the ECB's efforts.'
"The stakes are high for the ECB's expanded QE program, and its impact will be closely watched, said Charles Collyns, chief economist at the IIF. "This simple but intuitive tool will be used to track the success of the ECB's easing policies in returning inflation to its medium-term target."
The Dashboard includes 17 selected financial, real economy and inflation variables which are aggregated into three components (see above) to monitor the transmission of the monetary impulse through the Euro Area economy.
The Dashboard evaluates to what extent monthly movements in each of these variables are in line with the ECB's objectives using a "traffic light" color code; dark green indicates movement in line with the ECB's intentions and dark red the opposite.
The IIF said that transmission appeared most advanced among financial variables which are clearly in green territory - implying that the first part of the transmission mechanism in in full swing.
The IIF will release an updated version of the Dashboard coinciding with future ECB monetary policy meetings.
The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. Within its membership IIF counts commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.