Connect with us

Global Banking and Finance Review is an online platform offering news, analysis, and opinion on the latest trends, developments, and innovations in the banking and finance industry worldwide. The platform covers a diverse range of topics, including banking, insurance, investment, wealth management, fintech, and regulatory issues. The website publishes news, press releases, opinion and advertorials on various financial organizations, products and services which are commissioned from various Companies, Organizations, PR agencies, Bloggers etc. These commissioned articles are commercial in nature. This is not to be considered as financial advice and should be considered only for information purposes. It does not reflect the views or opinion of our website and is not to be considered an endorsement or a recommendation. We cannot guarantee the accuracy or applicability of any information provided with respect to your individual or personal circumstances. Please seek Professional advice from a qualified professional before making any financial decisions. We link to various third-party websites, affiliate sales networks, and to our advertising partners websites. When you view or click on certain links available on our articles, our partners may compensate us for displaying the content to you or make a purchase or fill a form. This will not incur any additional charges to you. To make things simpler for you to identity or distinguish advertised or sponsored articles or links, you may consider all articles or links hosted on our site as a commercial article placement. We will not be responsible for any loss you may suffer as a result of any omission or inaccuracy on the website. .

Business

ECB focuses on bank credit, bonds in gauging financing conditions – Lane

Published : , on

FRANKFURT (Reuters) – The European Central Bank primarily focuses on bank credit conditions and bond yields when assessing if financing conditions are favourable, ECB Chief Economist Philip Lane said on Monday, fleshing out key conditions for setting stimulus.

ECB President Christine Lagarde renewed a commitment to maintaining “favourable” financing conditions last week but did not detail how these conditions would be measured and sources close to the discussion said policymakers could not agree on which gauges to focus on.

“Naturally, the focus on credit conditions in the banking system on the one side and the bond markets on the other is consistent with the main methods used by central banks in steering financing conditions,” Lane said.

Policymakers will revisit the issue at their March meeting in a potentially critical seminar that could determine how the ECB spends its 1 trillion euros of remaining firepower in its Pandemic Emergency Purchase Scheme (PEPP).

But some policymakers are critical of putting too much emphasis on government bond spreads as that could reduce the incentive for good fiscal policy and may be seen as exceeding the bank’s inflation-fighting mandate.

“The ECB routinely looks at a wide range of measures … with a prominent focus on the conditions facing customers who depend on bank-intermediated credit, as well as the conditions facing sectors which seek to obtain funding in bond markets,” he added.

Lane added that any premature steepening of the yield curve would work against the ECB’s efforts to counter the shock of the pandemic.

In a speech consistent with Lagarde’s policy statement, Lane repeated that the ECB will not necessarily spend all of its remaining bond purchase firepower while reserving the right to increase spending, if market conditions worsen.

“If favourable financing conditions can be maintained with asset purchase flows that do not exhaust the envelope over the net purchase horizon of the PEPP, the envelope need not be used in full,” Lane said.

(Reporting by Balazs Koranyi; Editing by Francesco Canepa and Catherine Evans)

Uma Rajagopal has been managing the posting of content for multiple platforms since 2021, including Global Banking & Finance Review, Asset Digest, Biz Dispatch, Blockchain Tribune, Business Express, Brands Journal, Companies Digest, Economy Standard, Entrepreneur Tribune, Finance Digest, Fintech Herald, Global Islamic Finance Magazine, International Releases, Online World News, Luxury Adviser, Palmbay Herald, Startup Observer, Technology Dispatch, Trading Herald, and Wealth Tribune. Her role ensures that content is published accurately and efficiently across these diverse publications.

Global Banking & Finance Review

 

Why waste money on news and opinions when you can access them for free?

Take advantage of our newsletter subscription and stay informed on the go!


By submitting this form, you are consenting to receive marketing emails from: . You can revoke your consent to receive emails at any time by using the SafeUnsubscribe® link, found at the bottom of every email. Emails are serviced by Constant Contact

Recent Post