The ECB’s Banking Supervision Committee met in an extraordinary meeting this Friday to analyze the financial turmoil of the past few days. The institution excludes the adoption of appropriate decisions. “The aim is to exchange ideas and gather the latest information on recent developments in the banking sector,” as the ECB representative himself confirmed to elDiario.es.
The meeting comes after the governing council this Thursday was obsessed with another hike in interest rates by 0.5 basis points to 3.5%, even though it would mean increasing the risk of a financial crisis.
The ECB’s big objection is that it continues to throttle the economy to fight inflation, but has insisted on guaranteeing a “lifeline” for banks, following the collapse of Silicon Valley Bank in the US and the bailout of Credit Suisse in Switzerland. The first national bank, also in the world’s first economy.
Within the institution, monetary policy decisions such as those announced this Thursday and banking supervision, whose committee was convened this Friday, are independent. So one meeting does not replace another. And various knowledgeable sources consider the latter committee’s response to the turmoil in financial markets in recent days, both due to the stock market failure of Eurozone banks and fears of new liquidity problems and massive debt purchases, to be “natural”.
According to the same sources consulted by elDiario.es, there is no need to expect any kind of communication from the supervisory committee this Friday. Next Tuesday, March 21, its president Andrea Enria will be presented to the European Parliament.
In its statement this Thursday, the ECB’s Governing Council added two emergency clauses, after three stars, saying “it has all the necessary monetary policy tools to ensure liquidity support for the euro area financial system” in the event of a problem. demands.
President Christine Lagarde and ECB Vice-President Luis de Guindos defended at a press conference that “in terms of financial stability, European banks are resilient and their capital ratios are higher than in 2008.” De Guindos also insisted that the sector’s exposure to Swiss bank Credit Suisse is limited.
The president and vice president explained that the monetary authority has a broad set of tools that “can be reactivated and are ready to be used.” Among them, they mentioned the Emergency Debt Purchase Program (PPEP), which was created in response to the shock of the COVID pandemic, or other ways of injecting liquidity into banks.
Source: El Diario