glossario

Monetary policy concerns the decisions taken by central banks to influence the cost and availability of money in an economy.

In the euro area, the European Central Bank's most important decision in this respect normally relates to the key interest rates. Any change it makes to these rates affects in turn the interest rates commercial banks charge their customers for borrowing money. In other words, the decision influences consumer spending and business investment. In the case of the ECB, the objective of monetary policy is to keep prices stable, i.e. to keep inflation below, but close to, 2% over the medium term. This in turn helps it support general EU economic policies aiming at full employment and economic growth.

In times of prolonged low inflation and low interest rates, central banks may also adopt non-standard monetary policy measures, such as asset purchase programmes

The Bank of Italy contributes to draft monetary policy for the euro area through the Governor's participation in the Governing Council of the ECB. The Governor exercises his duties in full autonomy and independence, contributing to monetary policy decisions also based on the preparatory activities of the committees and working groups set up within the Eurosystem, which include representatives from the Bank of Italy. In accordance with the principles of decentralization and subsidiarity established at European level, the Bank of Italy also contributes to implementing monetary policy.