Exclusive: ECB Insider: When You Develop an Anti-Fragmentation Tool, It Means You’re Afraid
- ECB insider: Would be good to have an anti-fragmentation tool, but there are also risks to this
- ECB insider: Issues of communication make us ‘not that much inclined to work on that instrument’
- ECB insider: PEPP framework can always be renamed and employed as an anti-fragmentation tool
By David Barwick – PARIS (Econostream) – As determined as European Central Bank Executive Board member Isabel Schnabel is to prevent fragmentation from derailing the ECB’s incipient policy normalisation, it is considerably more questionable whether her verbal intervention on Tuesday evening will achieve the desired effect on any sustained basis.
15 June 2022
By David Barwick – PARIS (Econostream) – The European Central Bank’s unlimited commitment to the euro implies that fragmentation will not be allowed to hamper monetary policy transmission, ECB Executive Board member Isabel Schnabel said Tuesday.
14 June 2022
By David Barwick – FRANKFURT (Econostream) – The following is a reasonably complete compendium of the most recent comments made by European Central Bank Governing Council members with respect to monetary policy. Updates are made on a periodic basis.
14 June 2022
- ECB insider: ‘There are views that we need to start more general discussions’ about QT
- ECB insider: ‘Time to start talking now for [QT] decisions to be ready sometime later in the future’
- ECB insider: ‘One day we will approach’ topic of neutral rate, but now dealing with hiking
- ECB insider: ‘Very broad and diverging views’ on where neutral rate stands
- ECB insider: Lagarde said, ‘We may have different views, but today we need to take a decision’
By David Barwick – FRANKFURT (Econostream) – Absent from both European Central Bank President Christine Lagarde’s monetary policy statement and the entire subsequent press conference on Thursday was any mention of exchange rate developments.
10 June 2022
- ECB insider: ‘Very high probability it’s going to be 25 basis points’ in July
- ECB insider: If inflation expectations de-anchored, ‘would we stick to 25? I don’t think so’
By David Barwick – FRANKFURT (Econostream) – Speaking less than two weeks ago to Econostream, a European Central Bank insider jokingly commented that ‘it seems that we don’t even meet in June. It seems that everything is decided already.’
7 June 2022
By David Barwick – FRANKFURT (Econostream) – Perhaps as part of the recent convergence of views among Europe’s monetary policymakers in the face of worryingly high inflation, European Central Bank insiders seem confident that ECB policy won't be hindered by the way philosophies across the Governing Council correlate to the indebtedness of individual members’ respective country of origin.
6 June 2022
- ECB insider: Gradualism is ‘a relative concept’, not an automatic objection to 50 bps
- ECB insider: Once Fed decided on 50 bps each meeting, obvious ECB must think about our steps
- ECB insider: Starting with 25 bps and then doing 50 would be ‘more gradual than 50 on the spot’
- ECB insider: ‘The relevant thing will be the path’ of rates, not so much each step
By David Barwick – PARIS (Econostream) – European Central Bank Governing Council member François Villeroy de Galhau on Thursday said that high core inflation required that monetary policy be normalised.
2 June 2022
By David Barwick – FRANKFURT (Econostream) – The following is a reasonably complete compendium of the most recent comments made by European Central Bank Governing Council members with respect to monetary policy. Updates are made on a periodic basis.
31 May 2022
- ECB insider: ‘This is a war that is already lost’
- ECB insider: ‘No point in fighting something that is going to happen anyway’
- ECB insider: ‘We are not going to do FX interventions’
- ECB insider: ECB won’t explicitly take any specific action because of the exchange rate
- ECB insider: ‘Parity for euro-dollar is just one figure like the others’
By David Barwick – FRANKFURT (Econostream) – European Central Bank Chief Economist Philip Lane in an interview published Monday confirmed the key messages of President Christine Lagarde’s blog a week ago today, presumably putting to rest the scepticism of at least one Governing Council member as to whether the ECB would really deliver the end of net asset purchases in the coming weeks and – probably - a deposit rate of zero percent by the end of the summer.
30 May 2022
- ECB insider: We stand ready to react flexibly to fragmentation; ‘forget about specific tools’
- ECB insider: I assume there will be similar provisions for APP as for PEPP reinvestments
- ECB insider: Hiking rates not so risky that we need to prepare for damage control ex ante
- ECB insider: It’s the sovereigns, not the ECB, that need to take care of their spreads
- ECB insider: Must see other jurisdictions’ QT experience, so ECB hawks not yet pushing the issue
- ECB insider: QT is ‘one of the optionalities that we have if there is a need to start it earlier’
- ECB insider: ‘Things are moving so fast that I wouldn’t be surprised at being surprised’ on QT
By David Barwick – FRANKFURT (Econostream) – The European Central Bank should end net asset purchases and then gradually get official borrowing costs out of negative territory, ECB Executive Board member Fabio Panetta said Wednesday.
25 May 2022
By David Barwick – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos on Wednesday said that the main threat to euro area financial stability stemmed from the macroeconomic ramifications of Russian military aggression
25 May 2022