FRANKFURT (MNI) – Eurozone economic and financial conditions remain
fragile despite some recent calming, Bundesbank Vice President
Franz-Christoph Zeitler said Thursday.
In Germany, fear of a credit crunch has subsided considerably, but
the situation must still be monitored closely, the central banker said,
according to prepared remarks for a banking conference provided in
advance.
“Despite an interim calming, the situation is still fragile,”
Zeitler said. “This is shown in spreads of sovereign bonds and
securities as well as in the increased use of the Eurosystem’s deposit
facility,” he explained.
Even if the money market in Germany is hardly affected by this
development, it is still a sign of insecurity and reduced trust among
financial institutions in the Eurozone, Zeitler remarked.
In reference to the domestic economy, Zeitler said the discussion
of a credit crunch “has calmed considerably.” Still, “we must
attentively observe the situation.” So far, credit developments are at
the level that was to be expected by extrapolating from earlier economic
cycles, he noted.
–Frankfurt bureau; +49-69-720142; frankfurt@marketnews.com
[TOPICS: M$G$$$,M$X$$$,M$$EC$,M$$CR$]
