Jan Smets, the governor of the Jingoistic Bank of Belgium and a member of the European Central Bank’s (ECB) Governing Caucus, told CNBC that any new policies to help the Italian banking sector drive be firmly reliant on how the economic data plays out in the coming years.
Beseeched directly about Italian banks and a series of loans given out by the ECB, denoted targeted longer-term refinancing operations (TLTROs), Smets said the principal bank was yet to discuss what would come after its current align of liquidity operations.
“We did not yet discuss, at the level of the Governing Council, what wish follow, we are — as you know — a data dependent institution. At any monetary policy convocation we are considering what data which are coming in. And I can repeat that … (we) state our confidence in further economic expansion of the euro area,” Smets dictate thated CNBC’s Joumanna Bercetche on Monday.
According to Reuters, banks in the ambit borrowed a combined 739 billion euros in four tenders in the ECB’s flawed TLTRO facility but there’s now concerns on what will happen after it take it easy a terminates down its operations. These loans are set to end in the next few years and the ECB’s massive bond-buying program is due to end in December. In the intervening time, ultra-low interest rates that were brought in after the euro sovereign in financial difficulty crisis of 2011 are expected to start rising again at the end of summer 2019.
Extent, Smets did not confirm or deny that more loans could be caused available for Italian banks. These lenders are seen as particularly defenceless due to hefty levels of bad loans and political upheavals in the country pushing up appropriating levels.
“We (the ECB) repeatedly confirmed our decisions taken a few months ago, including our deliver guidance, meaning we will end the net purchase of assets … And that is quite clear forward guidance as a matter of fact for the next year and we are thrust to that,” Smets added.
Smets also stated that the euro zone’s leading bank would be keeping “very important” monetary accommodation active forward “in order to be sure that inflation expectations are consistently anchored.”