ECB hawks make case for more rate hikes to fight persistent inflation | – #ECB #hawks #case #rate #hikes #fight #persistent #inflation
SummaryCompaniesAustria and Belgian policymakers say more rate hikes may be on the way Austria’s Holzmann says ECB rates could exceed 4% Both bank reduces the risk of sector instability
March 18 (Reuters) – Europe The European Central Bank (ECB) will need to raise interest rates further to tame persistent inflation, two top hawks on the bank’s Governing Council said on Saturday. 20In addition to reducing the risk of a repeat of the 2008 financial crisis, they said. crisis.
The comments from the heads of the central banks of Austria and Belgium backed those of their two hawkish counterparts a day earlier, their Slovakian and Lithuanian counterparts, who called for higher rates to tackle euro zone inflation of 8.5%.
On Thursday, the ECB raised interest rates by 50 basis points as promised, inflation remained committed to the struggle with and some investors bank has faced calls to hold off on policy tightening until the turmoil in the sector subsides.
Robert Holzmann of Austria and Pierre Wunsch of Belgium said additional measures would likely be needed.
“Inflation is much tougher than thought,” Holzmann told Austrian radio ORF 1. “I expect interest rates to increase further.” He added that the amount of future increases will depend on the data.
The ECB raised its refinancing rate to 3.5% on Thursday, raising its benchmark rate by 350 basis points since last July.
“We know we have to do more than this,” Wunsch told Belgian newspaper L’Echo. “By what measure?” This is not clear. There will be a meeting with a meeting.”
Asked how high the benchmark rate could go, Holzmann said: “Some of us hope it will stay below 4(%). I am afraid it will go above 4(%).
Wunsch, the main of the ECB inflation if his prediction comes true, “a long way” he said.
ECB on Thursday, this week bank It predicted inflation would remain above its 2% target through 2025, based on projections it said were drawn up before a big selloff in its shares.
The ECB also admitted on Thursday that USAThe outlook has become more uncertain since the collapse of two banks in , and more trouble at Credit Suisse Group ( CSGN.S ).
NO RISK OF LOSS
Since the collapse of Silicon Valley Bank and Credit Suisse central bank 54 billion dollars Bank reserves have been shaken globally since the bailout, raising questions about other weaknesses in the financial system.
20Asked if he saw the risk of another global financial crisis like the one in ’08, Holzmann said: “No, because both of them — the problems of Silicon Valley Bank and now Credit Suisse — are very specific problems.”
Credit Suisse was dealing with a “protracted restructuring challenge”.
Wunsch said: “Europe we do not see a structural problem with banks”, although USAIt remains to be seen how the events in the banking sector and around Credit Suisse will affect in the coming days.
“If we look at the numbers rationally, we see no risk of contagion, no risk of instability,” Wunsch said.
Asked about Credit Suisse’s future, Wunsch said he saw only a “very low” chance of the bank failing.
“Firstly, according to public figures, its situation is not bad in itself, and secondly, because it is a systemically important bank, the Swiss authorities would intervene if necessary.
Added by Balasz Koranyi report; Edited by David Holmes
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2023-03-19 00:06:10
Source – reuters
Translation“24 HOURS”