ECB's Unconventional Monetary Policy

The article analyses the contemporary monetary policy of the European Central Bank and its theoretical basis, which, according to the author, combines monetarist and Keynesian approaches. This is proved by the fact that ECB from its very beginning follows the rule of maintaining the yearly price growth at 2% to secure both relative price stability and stimulation of economic activity in the region. The author studies the causes of deflation trends and efficiency of ECB's use of non-traditional monetary policy, which combines nontraditional regulation instruments (purchase of state and corporate bonds in the open market) with the support of less developed EU economies, burdened by excessive state debt. Comparison of inflation targeting mechanisms in the Eurozone and Russia allowed the author to determine the main downfall of the Russian monetary policy, aimed exclusively at lowering inflation by money supply contraction despite the fact that it may cause production decrease. The article offers recommendations on improving Russian banking regulation providing for an anti-inflation policy which would not hurt, but rather promote the national economy growth.