The European Central Bank “is ready for all eventualities” in the event of a favorable vote in Brexit in Thursday’s referendum in Britain. The said Mario Draghi, ECB president, speaking in Brussels before the Economic and Monetary Affairs Committee of the European Parliament. Draghi added that the economy “uncertainties remain high and downside risks (ie a worsening of the situation, ed) are still significant due to the state of persistent global economic weakness and geopolitical developments.”
Draghi indicated that “it is very difficult to predict the impact of the British vote in its various dimensions, the markets and the economy of the euro zone.” He added that it is also “hard to speculate on the outcome of the vote in one way or another, we are certainly ready to face all eventualities, but at this point it’s hard to be more specific than that.” The ECB, he added, “has made all the necessary preparations.” The ECB president did not provide details of the possible measures that the central bank intends to take in case Thursday Brexit prevail. It is limited to launch a political message, “Our focus is to make our common home, Europe, stronger.”
Monito ECB to banks: improving governance and principals on risks
Speaking of the economic situation Draghi noted that the economic recovery in the euro area “is gaining ground and is expected to proceed at a moderate pace but constantly supported by a usual domestic demand and effective transmission of monetary policy to the real economy. ” Investment too, although insufficient, are supported by higher corporate profits and favorable financial conditions. Inflation in any case “will remain at low levels in the coming months” prejudice “rather subdued”, he added the ECB President (in May was slightly negative).
Draghi gave no new hints of analysis of monetary and economic situation compared to the latest indications from the ECB. He wanted to stress that monetary conditions favorable working, as shown by surveys on access to finance for businesses who “continue to show further improvement and the increased willingness of banks to provide credit at lower interest rates.” Another sign that “the new bank lending to businesses is increasingly ‘used to finance investment projects.”
Draghi went on to take stock of the new stimulus measures approved in March. “Tomorrow the ECB will start the first operation of the new series of targeted long-term refinancing operations, Tltro II.” The ECB expects more enterprises, including small and medium-sized, are able to have access to that external financing in the near future when the corporate debt market will expand and deepen. The Tltro II “will allow banks to provide long-term financing at very attractive terms.”
The ECB displaces all: cuts rates, brings the Qe 80 billion and buy corporate bonds
The other news announced in March, covers the purchase of corporate bonds, took him June 8th. The ECB said yesterday that it has acquired corporate bonds for 1.9 billion euro in the week to June 17. This is the first full week for this type of operations. As is apparent from the Eurotower weekly report, during the period the public sector bond purchases came in at nearly 16.92 billion euro, compared to just over 17.73 billion in the week to June 10 for the program q. The total purchases of covered bonds rose to 1.219 billion (1.491 billion the previous week) for a total of almost 181 070 000 000 and that of asset-backed securities (Abs) to 0.267 billion ( 0.131 billion the previous week) to about 19.56 billion. In the week to June 17, the total purchases were therefore placed in 20.303 billion, from 19.70000000000 the previous week.
(Il Sole 24 Ore Thomson Plus)
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