According to Anna Stupnytska, Global Macro Economist of Fidelity International, the weakness of the banking sector, although so far limited to isolated stories, is an effect of the very tight monetary policy
The tensions on the markets and the weaknesses of the banking sector have not affected the determination of the European Central Bank in fighting inflation. At its meeting on Thursday 16 March, the Governing Council, in order to bring inflation back towards the 2% target, increased interest rates by 50 basis points, bringing the main lending rate to 3.5%.
THE MESSAGE OF THE ECB
“With this choice, the ECB clearly wanted to highlight its ability to address financial stability problems with adequate tools, without however diverting its gaze from the objective of price stability”, he comments Anna Stupnytska, Fidelity International’s Global Macro Economist. Furthermore, the expert specifies, unlike the previous meeting, the ECB abandoned forward guidance, underlining the importance of dependence on data and signaling its willingness to “respond as necessary” to preserve price stability and financial stability in the future. euro area…
** This article was written by FinanciaLounge