March 7, 2019 / 8:13 AM / 2 months ago

ECB seen taking tentative step to prop up ailing euro zone

FRANKFURT (Reuters) - The following are key quotes from ECB policymakers in the weeks preceding the March 7 policy meeting.

FILE PHOTO: General view of the exterior of the European Central Bank (ECB) building on the inaugural of it's new headquarters in Frankfurt March 18, 2015. REUTERS/Wolfgang Rattay/File Photo

MARIO DRAGHI, ECB PRESIDENT, JAN. 28

“If things go very wrong we can still resume the use of other instruments in our toolbox, one of which is (asset purchases). There is no objection to that possibility ... At this point in time, we don’t see such a contingency as likely to materialize this year, certainly not this year.”

PETER PRAET, CHIEF ECONOMIST, FEB. 18

“After the end of our net asset purchases, the primary instrument to steer our monetary policy stance is again our key interest rates.

“Asset purchases are part of our current toolbox ... But that doesn’t mean that they are the preferred option in current conditions.

“If forward guidance on interest rates is credible and steers expectations in the desired direction, further purchases may not be needed at all.

“If the euro area economy were to slow more sharply, we could adapt our forward guidance on interest rates and this could be complemented by other measures ... the ECB’s Governing Council will always find ways and means of acting if it needs to.”

BENOIT COEURE, BOARD MEMBER, FEB. 15

On new long-term loans to banks: “It is possible, we are discussing it. But we want to be sure that it serves a ... purpose.”

“There might be scope for another TLTRO.”

PETER PRAET, CHIEF ECONOMIST, FEB. 20

On new long-term loans to banks: “The discussion will come very soon in the Governing Council... (But) it doesn’t mean we’ll take decisions ... at that time.”

PHILIP LANE, IRISH CENTRAL BANK CHIEF AND BOARD MEMBER CANDIDATE, FEB. 26

“It’s also clear from many surveys that there’s been a sequence of negative shocks in recent times. But I think it’s also fair to say that all of this is in the neighborhood of reasonably small adjustments to the forecasts. I think the current strategy can cater to limited downside revisions. The current strategy, remember, has a lot of forward guidance in it.”

JENS WEIDMANN, BUNDESBANK PRESIDENT, FEB. 27

“I see no acute need now to change the forward guidance”

FRANCOIS VILLEROY DE GALHAU, BANQUE DE FRANCE CHIEF, FEB. 22

“But should a downturn last beyond that horizon (of spring or summer) — a less plausible scenario but one which cannot be excluded — we would be ready to adapt our monetary policy guidance.

“If we had to use negative rates for a longer period than expected, we should study pragmatically how to contain their possible adverse effects on the bank transmission of our monetary policy.”

Editing by Catherine Evans

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