ECB Chief Economist Philip Lane emphasized today that “we don’t think we’re at a limit as of yet” regarding monetary policy. But he also urged “the bigger focus should be rather on what … other policies can contribute to make this limits question less relevant, less interesting because the economy would be growing more quickly.”

Lane added, “Europe needs a big conversation among fiscal policymakers about how to stimulate the economy.” Meanwhile, policy makers “do care about how banks are adjusting to negative interest rates.”

ECB Governing Council member Boštjan Vasle said “I do not see any reason for a further change in growth prospects” of Eurozone. The economy is “developing in a way which was predicted in our latest projections; at the moment things are under control, going in a direction which is not unexpected.”

He added, “we are in a situation where the business cycle is in the late phase, the economic situation is deteriorating and our monetary policy is quite stretched at the moment”. Nevertheless, “if the situation changes, there is still room to go in that direction” of more policy easing.

For now, “it’s been too short of a time to judge the impact since we adapted the package” back in September.

ECB Vice President Luis de Guindos said that ” recent softening of the macroeconomic growth outlook” and the “associated low-for-longer interest rate environment” are likely to weigh further on banks’s profitability prospects.

He noted “many market analysts are concerned about the drag on bank profitability that could result from the negative impact of monetary policy accommodation on net interest margins”. And, “net interest margins are indeed under pressure”.

He also said that recession in Eurozone is a very unlikely event. Meanwhile, the central banks won’t reach the limits on the QE program shortly.

ECB Vice President Luis De Guindos said today the central bank has to widen its monetary policy toolkit to ensure its effectiveness. Though, he emphasized that monetary policy alone cannot address all problems. He urged country with fiscal spaces to do more. He added that European economy is not going to fall into recession but growth will be below potential.

Separately,chief economist Philip Lane said euro’s exchange rate is not a policy target for the ECB. But, “It’s plausible that the impact of rate cuts on the euro exchange rate has intensified over time.”