WASHINGTON (MNI) – The pace of the European Central Bank’s
unwinding of non-conventional measures will depend on further financial
market improvements, ECB Executive Board member Lorenzo Bini Smaghi said
Friday.
“The exit depends on underlying conditions,” Bini Smaghi said
during a panel discussion here on coordinated exit strategies across
different regions. “If the economy improves — to some extent
endogenously — the markets will ask for less. And that is what we are
observing.”
Bini Smaghi said he did not “believe in a theory that you have to
force market participants to hold much more liquidity,” questioning
whether such liquidity would be pumped into the real economy.
The Executive Board member also observed that banks have so far
adjusted very well to the expiration of liquidity operations and
confirmed that interest rates remain “appropriate” after the ECB left
its refi rate unchanged at 1.0% again on Thursday
–Frankfurt bureau tel.: +49-69-720142. Email: jtreeck@marketnews.com
[TOPICS: M$$EC$,M$X$$$,M$$CR$,MGX$$$,MFX$$$$]
