ECB: Does not see monetary policy as a tool to stimulate growth - BBH

Research Team at BBH, suggests that the ordoliberalism that Draghi acknowledges is part of the ECB's DNA does not see monetary policy as a tool to stimulate growth.  It is primarily to regulate the general price level. 

Key Quotes

“Draghi had also indicated that the asset purchases would not stop abruptly.  This meant it seemed that the ECB would decide to taper its purchases, like the Fed, did in QE3, rather than stop them cold. The press report confirmed that.  We are skeptical in reading any more into it.  There was no indication that the ECB was considering an early exit, and indeed, the original report acknowledged that the 80 bln euro a month asset purchases could be extended. 

We suspect there is reasonably strong chance that the asset purchases are extended beyond the current soft end date of March 2017.  Risks are still biased to the downside.  However, even if it decides to taper after March, that would still imply purchases all next year, and the likely need to modify its self-imposed rules to ensure minimal disruption via shortages of particular instruments. The least controversial measure may be to have the deposit rate (minus 40 bp) yield floor apply to portfolio averages rather than individual instruments.”