Praet Says ECB to Discuss Long-Term Loans Soon, Decision Unclear
(Bloomberg) -- European Central Bank officials will discuss new long-term loans for banks shortly, even though it’s unclear yet whether a decision will be taken, according to Executive Board member Peter Praet.
Praet’s comments signal that policy makers are getting ready for a more substantial debate about the state of the euro-area economy and the potential policy response at their March 7 meeting. Central-bank staff from across the region are currently updating growth and inflation forecasts for that gathering, incorporating the flurry of disappointing figures in recent weeks.
“I know the discussion will come back very soon in the Governing Council,” the ECB’s chief economists told an audience in Frankfurt on Wednesday. “It doesn’t mean you take the decision.”
The euro erased its gain against the dollar after the remarks. The currency was little changed at $1.1345 as of 10:04 a.m. Frankfurt time, having earlier reached $1.1356.
Praet also noted the weaker economic backdrop, which a number of policy makers have highlighted recently, and also the fact that it may prove more troubling than previously thought.
“What is clear is that the climate has been changing in a more fundamental way, not just transitory way and that has to do with global trade regime and the uncertainties,” he said. “We are not at the stage where we are in vicious circle yet, I don’t think so, but we are close to that.”
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