Posted on 18/02/2019 at 18h30
The European Central Bank (ECB) will take stock of the state and prospects of lending by the banking sector at its next monetary policy meeting in March, bearing in mind that a credit shortage could exacerbate the economic slowdown. course, says chief economist Peter Praet (pictured) in an interview with German daily Börsen-Zeitung. / Photo archives / More Bank / Ralph Orlowski
Thomson More Bank
These remarks should cement the expectations of a new salvo of long-term loans from the ECB to euro-zone banks to replace those of an amount of about 750 billion euros which will begin to expire next year. , creating a difficult situation for Italian banks and those of other southern European countries.
The eurozone economy continues to slow, challenging the ECB's intention to start raising interest rates after the summer.
"We need to watch closely the transmission of monetary policy to the banking system," says Peter Praet in the interview published on Monday. "In March we will do an analysis of the current and predictable bank transmission."
The central bank's targeted long-term refinancing operations (TLTROs) have been "very useful" and continue to be part of its "toolbox", he adds.
Benoît Coeuré, another member of the executive board of the ECB, had already raised Friday the possibility of a new TLTRO, stating that a discussion was ongoing on this subject.
In the interview, Peter Praet said he expects the ECB's macroeconomic projections to be lowered again in March, especially those for the short term, while highlighting some positive points such as consumption and employment.
But the chief economist acknowledges that the ECB could postpone the timing of its first post-crisis rate hike if necessary. "If the slowdown in the eurozone economy were to escalate, we could adapt our advanced interest rate communication and this could be complemented by other measures," he says.
(Francesco Canepa, Véronique Tison for French service, edited by Juliette Rouillon)