ECB’s Lane Pledges Cheap Credit as Long as Pandemic Crisis Lasts
ECB’s Lane Pledges Cheap Credit as Long as Pandemic Crisis Lasts
(Bloomberg) -- The European Central Bank will provide enough monetary stimulus at its next meeting to make sure governments, companies and households have access to cheap credit throughout the coronavirus crisis, according to chief economist Philip Lane.
“This pandemic is tough enough -- we shouldn’t add to it by having to deal with some kind of credit freeze, having to deal with rising interest rates,” Lane said in an interview with Portuguese TV channel RTP3 on Monday. “Our orientation is to keep financing conditions favorable.”
ECB President Christine Lagarde said at last month’s policy meeting that her institution would “recalibrate” its monetary stimulus to help cushion the shock of renewed lockdowns as coronavirus infections surge.
The euro zone is on the verge of another slump with travel disrupted and restaurants and bars closed. While recent announcements suggest vaccines are close to being completed, they’ll come too late to avoid more economic damage.
Policy makers have signaled that they’re willing to increase the ECB’s 1.35 trillion-euro ($1.6 trillion) emergency bond-buying program and come up with more long-term loans for banks.
Lane, who writes and presents the monetary-policy proposals, signaled he’s on board with that, without hinting at the size of any stimulus.
“I don’t think from a point of view of any household, firm or government, the focus should be on some particular number,” he said. “We always will have some kind of plan, some kind of program, some kind of volume of purchases, but that basically can always be adjusted to deliver what we need to for those favorable financing conditions.”
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