ECB’s de Cos: Monetary policy to remain highly accommodative for prolonged period of time


While speaking to Reuters on Thursday, the European Central Bank (ECB) Governing Council member Pablo Hernandez de Cos said that the monetary policy to remain highly accommodative for a prolonged period of time.

Additional Comments

Coronavirus does keep balance of risks to downside.

European banks should step up their efforts to adapt their business models and become more profitable.

Low-for-long interest rate environment could be encouraging excessive risk-taking by some financial intermediaries.

Asset valuations appear stretched in several advanced economies in markets such as equity, high-yield debt, and property markets.

Challenges to global financial stability include risks related to governance failures.

Crucial that financial market participants keep improving their governance and restore the confidence of their clients as soon as possible.

Brexit entails significant risk of further fragmentation, as some companies may relocate to different financial centres.

EUR/USD off multi-month lows

Despite dovish reiteration from the ECB policymaker, the corrective bounce in EUR/USD remains intact around 1.0885 region. The spot hit a new 33-month low of 1.0865 amid increased odds of more ECB stimulus, as the economic situation in Germany deteriorates.  

 

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