ECB Governing Council Member Says Loans to Italy to be Based on New Data

Jan Smets, the governor of the National Bank of Belgium and a member of the European Central Bank’s (ECB) Governing Council, told CNBC that any new policies to help the Italian banking sector would be firmly reliant on how the economic data plays out in the coming years.

Asked directly about Italian banks and a series of loans given out by the ECB, called targeted longer-term refinancing operations (TLTROs), Smets said the central bank was yet to discuss what would come after its current range of liquidity operations.



“We did not yet discuss, at the level of the Governing Council, what will follow, we are — as you know — a data dependent institution. At any monetary policy meeting we are considering what data which are coming in. And I can repeat that … (we) maintain our confidence in further economic expansion of the euro area,” Smets told CNBC’s Joumanna Bercetche on Monday.

According to Reuters, banks in the region borrowed a combined 739 billion euros in four tenders in the ECB’s second TLTRO facility but there’s now concerns on what will happen after it winds down its operations. These loans are set to end in the next few years and the ECB’s massive bond-buying program is due to end in December. Meanwhile, ultra-low interest rates that were brought in after the euro sovereign debt crisis of 2011 are expected to start rising again at the end of summer 2019.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza