FRANKFURT (Reuters) - The following are key quotes from European Central Bank policymakers ahead of the Dec. 10 rate-setting Governing Council meeting.
CHRISTINE LAGARDE, ECB PRESIDENT, NOV. 11
“While all options are on the table, the PEPP and TLTROs have proven their effectiveness in the current environment and can be dynamically adjusted to react to how the pandemic evolves. They are therefore likely to remain the main tools for adjusting our monetary policy.
“When thinking about favourable financing conditions, what matters is not only the level of financing conditions but the duration of policy support, too. All sectors of the economy need to have confidence that financing conditions will remain exceptionally favourable for as long as needed -- especially as the economic impact of the pandemic will now extend well into next year.”
PHILIP LANE, ECB CHIEF ECONOMIST, NOV. 26
“There are some worrying signals in recent survey data. The October euro area bank lending survey (BLS) reports a broad-based tightening of credit standards that banks attribute primarily to the risks underlying the macroeconomic environment and a deterioration in borrower creditworthiness ... A similar message is also provided by the latest Survey on the Access to Finance of Enterprises in the euro area (SAFE): SMEs expect the availability of external and internal sources of finance to deteriorate.
“Tolerating a longer phase of even lower inflation than originally envisaged would be costly and risky. First, it would imply a weaker recovery of consumption and investment, as a result of higher expected real interest rates. Second, it would contribute to a downward drift in inflation expectations that might become entrenched.
LUIS DE GUINDOS, ECB VICE PRESIDENT, NOV. 28
“The fourth quarter will be worse than forecast, but the medium-term outlook -- mainly because of the ray of hope brought by news of the vaccine -- looks brighter.
“All in all, we expect inflation to be close to 1% in 2021 and to see it moving up towards 1.2% or 1.3% in 2022.”
ACCOUNTS OF OCT. 29 MEETING
“Any sign of complacency -- even inadvertent -- could be detrimental in the present circumstances.
“It would be important to consider the possibility that the pandemic might have longer-lasting effects both on the demand side and on the supply side, reducing potential growth.”
PHILIP LANE, CHIEF ECONOMIST, DEC. 1
“If we can keep financing conditions where they are these days, at a low level, that supports the economic recovery and offsetting the pandemic shock to inflation.”
FRANCOIS VILLEROY DE GALHAU, BANQUE DE FRANCE GOVERNOR, NOV. 27
“Faced with the risk of prolonged uncertainty, our first objective must be to ensure that these financing conditions remain very favourable for everyone for as long as necessary.
“To this end, the forthcoming recalibration of our instruments will require paying particular attention not only to the level of our monetary support, but also issues of their duration, flexibility and effective targeting -- in short, the quality of the transmission of our monetary policy.”
Reporting by Balazs Koranyi; Editing by Catherine Evans
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