By Tom Fairless
European Central Bank President Christine Lagarde signaled that the bank is gearing up for a lengthy review of its strategy and toolbox, to reflect deep changes to Europe's economy that range from demographics to disruptive technologies and climate change.
Speaking at a hearing before European lawmakers in Brussels, Ms. Lagarde said the ECB's review would "start in the near future" and "be guided by two principles: thorough analysis and an open mind." She wouldn't be drawn on any likely timeline or conclusions.
"This will require time for reflection and for wide consultation," she said.
The ECB's review of its strategy, similar to one currently being conducted by the Federal Reserve, comes as economists worry how much more central banks can achieve with current policy tools that include interest-rate cuts and asset purchases.
It could trigger changes to the ECB's inflation goal or the tools the bank uses to steer the economy. The ECB currently aims to keep inflation just below 2% over the medium term.
"New challenges have emerged such as demographics, disruptive technology and climate change," Ms. Lagarde said.
"Conventional wisdom has been challenged and monetary policy globally has explored unchartered territories. This calls for us to review our strategy and to consider how our monetary policy can best deliver on our mandate."
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