ECB's Villeroy: First objective needs to be to keep favourable financing conditions for as long as needed
Comments by ECB policymaker, Francois Villeroy de Galhau
- Recalibration of policy instruments must not only focus on level of support
- But also timeframe, flexibility and efficient targeting
- Crisis tools have been proportionate, effective
- Sees a case for allowing banks to resume dividends
All of the signs continue to point to PEPP stimulus being the main policy tool that they will work with next month, with the likelihood of enhancing TLTROs to ensure credit conditions are also sufficient in the system.
Other than that, there might not be much else that the ECB can do.