Villeroy Says ECB Should Favor Gradual Cuts Over Acting Too Late

The European Central Bank should avoid waiting too long to cut rates as it will still have flexibility over the pace and degree of policy loosening after its first move, Governing Council member Francois Villeroy de Galhau said.

The Bank of France governor said it now seems established that the ECB will cut rates at some point this year and added that the risk of moving too late exists “at least” as much as that of moving too soon. In an interview with Belgian newspaper L’Echo, he said the central bank has three types of flexibility: when, how fast, and how far it reduces borrowing costs.