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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