- Complete banking union would benefit economy, Praet says
- ECB chief economist says policies hasten credit provision
European Central Bank Executive Board member Peter Praet said policy makers will continue to use the tools at their disposal to address any liquidity shortages that may arise in the euro area.
“In a complex and incomplete institutional environment, the Eurosystem has been able to adapt its set of interventions by using all the flexibility allowed by our instruments in a principled way to address both systemic and idiosyncratic liquidity problems,” Praet said today in a speech in Washington. “We will continue to do so.”
The ECB will convene again in March to discuss whether additional easing is necessary to boost inflation in the 19-member euro area toward the goal of just under 2 percent, and markets are pricing in more accommodation. Praet said in remarks prepared for delivery that to date, monetary policies have helped to spur activity.
“The asset purchase program, together with a negative rate on excess reserves, quickens the pace at which banks and other lenders are resuming providing credit to the economy at more favorable conditions,” Praet said.