Neither hawk nor dove: 'Wise owl' Lagarde bares major ECB review

Frankfurt/Brussels - Bank's 'strategic review' would start next month and aim to be completed by 'the end of 2020'

Christine Lagarde on Thursday announced a major review of the ECB's tools and goals and said the eurozone slowdown was beginning to ease as she made her debut as president vowing to bring her "own style" to the job.
Speaking at a Frankfurt Press conference after chairing her first governing council meeting, Lagarde said the bank's "strategic review" would start next month and aim to be completed by "the end of 2020".
A central focus of the reassessment, the ECB's first since 2003, will be to look at whether the bank's main objective of keeping inflation "close to, but below" 2 per cent was still relevant after years of anaemic price growth.
But Lagarde said she also wanted to focus on "major changes" that have taken place since the last review, including the challenges posed by climate change and technological advances as well as rising inequality.
As expected, Lagarde kept her predecessor Mario Draghi's ultra-loose monetary policy unchanged on Thursday, holding interest rates at historic lows and leaving a monthly bond-buying programme untouched.
Lagarde said the ECB was seeing "some initial signs of stabilisation in the growth slowdown", despite "persistent global uncertainties".
Although her maiden Press conference was light on monetary policy news, Lagarde showed she was keenly aware that her performance was being closely scrutinised.
The former International Monetary Fund chief who has no prior central banking experience took pains to urge observers not to over-interpret her every word or compare her to former ECB boss Mario Draghi.
"Don't overinterpret, don't second guess, don't cross-reference; I'm going to be myself and therefore probably different," she told journalists.
"Once and for all, I'm neither a dove nor a hawk, and my ambition is to be this owl, that is often associated with a little bit of wisdom," said Lagarde.
The ECB also unveiled its latest growth and inflation forecasts, for the first time running through to 2022. Risks to the euro area outlook "remain tilted to the downside, but have become somewhat less pronounced", Lagarde said.
The ECB slightly lowered its eurozone growth forecast for 2020 to 1.1 per cent from 1.2 per cent, but said it saw output strengthening to 1.4 per cent in the following two years.
Inflation meanwhile is predicted to climb from 1.1 per cent in 2020 to 1.6 per cent in 2022 - bringing the ECB closer to its target.
Stay ahead of cryptocurrency curve
The European Central Bank hopes to have identified objectives for its taskforce on a digital currency by mid-2020, Lagarde said, adding the bank should be "ahead of the curve" on the issue.
She said the bank needed to decide what it wanted to achieve with the project before moving on to the technicalities.
"Are we trying to reduce costs? Are we trying to cut out the middleman? Are we trying have inclusive finance at no cost? There is a whole range of objectives that can be pursued."
Noting the interest shown by central banks in Canada, Britain and elsewhere, she said: "My personal conviction is that given developments we see, not so much in bitcoin but in stablecoins projects... we'd better be ahead of the curve because there is clearly demand out there that we have to respond to."
The ECB has been debating the pros and cons of introducing its own digital currency, which would give holders a direct claim on the central bank - just like with banknotes but without the inconvenience of storing large amounts of cash.
A digital currency would give the public a cheap and fast means of payment but would also have huge repercussions for the financial system and the central bank's own policy.