The European Central Bank is embarking on a new policy phase with its latest stimulus measures, ECB vice president Vitor Constancio said, vowing to steer the central bank’s balance sheet “significantly higher”.

Since summer, the ECB has cut interest rates to record lows, offered banks new long-term loans, and announced plans to buy private sector assets – a programme with which it aims to stimulate lending to support the flagging eurozone economy.

Constancio said in the text of a speech released yesterday that “the measures decided in the past few months mark a new phase in the ECB’s approach.”

“With these new measures, the Governing Council demonstrates that we are ready to actively steer the size of our balance sheet towards significantly larger levels, so as to further ease the stance of monetary policy,” he added.

Stressing that the economic recovery in the eurozone is “still weak and fragile”, the ECB vice president said the period of very low inflation levels the bloc is experiencing “raises serious concerns”.

Eurozone inflation slowed to 0.3 per cent last month – far below the ECB’s target level of just under 2 per cent over the medium term.

Constancio said the stock of covered bonds eligible for purchase by the central bank amounted to about €600 billion.