PARIS (Reuters) - Societe Generale said on Wednesday that the European Central Bank’s quantitative and monetary easing package announced last week was balanced and would be relatively neutral for French retail banking.
ECB chief Mario Draghi unleashed a bold easing package on Thursday, cutting rates and expanding asset buys, but he undid the very stimulus he hoped to achieve by suggesting there would be no further cuts.
“The ECB has taken into account the potential negative impact of negative rates...in terms of trying to design a new facility, including one where the ECB could pay for banks to borrow,” SocGen Chief Executive Frederic Oudea told a Morgan Stanley conference in London broadcast on the French bank’s website.
Oudea reiterated that SocGen expected a slight erosion of French retail banking revenue in 2016. SocGen has factored in shorter durations for deposits and expects clients to keep mortgages slightly longer than they did 10 years ago.
“The key question is for how long the rates will remain like this,” Oudea said. “And personally, I think that it will remain like this for two years.”
Oudea added that he was confident in the capacity of its investment bank to deliver good profitability, although he warned that 2016 could be a bumpy year due to worries about Brexit and presidential elections in the United States.
Reporting by Maya Nikolaeva; Editing by James Regan
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