The president of the European Central Bank (ECB), Luis de Guindos, warned about the effects of the fall in the US financial system on the euro area. He also spoke about how the rate program will be in the next two years, to counteract inflation.
The vice president of European Cental Bank (ECB), Luis de Guindosmade it clear that although “the period of negative interest rates has ended, at least in the medium term”, at the same time he warned that “we are going through a period of very high uncertainty”, he assured.
He said it in an interview with the Business Post collected on the website ofl ECB. After the 50 basis point rise in March, he explained, “there is now this additional element of uncertainty stemming from financial sector problems in the United States and Switzerland,” he added.
The Spanish Minister of Economy, Luis de Guindos.
The Spanish Minister of Economy, Luis de Guindos.
What will the ECB do after the “crack” of SVB
In this sense, de Guindos maintained that “we will adopt an approach in which decisions are made meeting by meeting. We do not pre-emptively commit to any action.” The banker also stressed that the question now is how events in the US banking system and Credit Suisse will impact the eurozone economy.
“In the coming weeks and months we have to assess whether they will lead to a further tightening of financing conditions.” However, the goal remains a timely return of inflation to 2%. “We know that it cannot be tomorrow, but it must be within our projection horizon, which is a period of two years,” he concluded.
The message of tranquility with the opposite effect to that expected
cherries had explained days ago, at the meeting of the Ecofin in Brusselsthat the European banks are much less exposed than the American ones to the crisis of the Silicon Valley Bank (SVB), the Signature and the Silvergate.
However, for investors and the market, the very prerogative of security and tranquility was the bomb that exploded in mistrust. The simple fact of warning that there would be no problems, and especially the mere mention of the words “contagion in the European Union”, implied a risk in itself.
Source: Ambito
I am a 24-year-old writer and journalist who has been working in the news industry for the past two years. I write primarily about market news, so if you’re looking for insights into what’s going on in the stock market or economic indicators, you’ve come to the right place. I also dabble in writing articles on lifestyle trends and pop culture news.
