The European Central Bank’s (ECB) July policy meeting has ended with policy-makers opting to maintain a cautious tone, presumably to keep a lid on rising Eurozone interest rates and currency.
The ECB kept its deposit rate deep in negative territory and maintained monthly bond purchases at €60-billion, in line with the expectation of most analysts in a Reuters poll.
Central bankers do not know what they are doing. The reason for this is that they are experimenting with the global economy. There has never been a similar situation in history to the one now unfolding because interest rates have never been so low or even negative and never have central banks resorted to QE as they have done in the last decade. They do not know what is going to happen if they continue the policies followed hitherto or if they try to “normalize” markets by reducing their balances and raising interest rates to “normal” levels. Another novelty is the huge sovereign debt that has been amassed since 2008.
The European Central Bank (ECB) said it will set up an instant payment system across the eurozone allowing consumers and firms to send money "within a matter of seconds".
The new service, TARGET instant payment settlement (TIPS), will enable citizens and firms to transfer money between each other in real time and will be available around the clock, 365 days a year.
It said the new network "will allow citizens and firms to make payments via their bank anywhere in the euro area within a matter of seconds", and is scheduled to come into operation in November 2018.
Nomura picked Frankfurt as the headquarters for its European Union operations after the UK leaves the bloc, Bloomberg reported.
Japan’s biggest brokerage will start preparations this month to form a base in the German financial centre, one of the people said, asking not to be identified as the matter is confidential. The decision will necessitate regulatory approval along with securing the requisite office space before transferring fewer than 100 employees from London to the city, according to the person.
European officials indicated on Monday that they had few hopes for a comprehensive agreement at Thursday’s Eurogroup that will pave the way for Greece to join the European Central Bank’s quantitative easing plan, despite a French push for a deal.
France’s economy minister, Bruno Le Maire, was in Athens Monday to discuss a proposal whereby relief measures for Greece’s mountainous debt would be strengthened when growth is weak and relaxed when growth is strong. However, he admitted that securing a deal would be “difficult and complex.”
The European Central Bank (ECB) left its benchmark interest rate unchanged on Thursday and dropped any reference to a future rate cut.
In a statement it said it expected interest rates to "remain at present levels for an extended period of time," but added that it would be ready to extend its quantitative easing (QE) program if needed.
The ECB kept its monetary policy unchanged. Though, strong economic recovery may encourage policymakers to start tightening monetary conditions. Do you share this point of view?
At this point, we agree that the Euro zone’s economy is strengthening. We have recently revised our forecast for this year, though I think the key point here is that the ECB has not really seen any reasonable signs of an economic recovery. We have seen a little bit stronger inflation earlier in the year due to energy effects; however, inflation is probably going to be lower this year than we thought six months ago. Even if the Euro zone economy is picking up steam, we certainly do not expect the ECB to start raising interest rates until 2019.
The idea of Italy leaving the eurozone, or ‘Italexit’, "does not have the slightest basis" in fact, European Central Bank President Mario Draghi said Wednesday in a verbal tussle with a Dutch MP. Draghi repeated that the euro is "irrevocable, and that’s what the Treaty says".
Confronted with the possibility of the Netherlands quitting Europe’s monetary union by Eurosceptic MP Thierry Baudet, an angry Mr Draghi said: “The euro is irrevocable. This is the treaty. I will not speculate on something that has no basis.”
Highlighting the ECB’s role in the eurozone’s economic recovery, he said policies had helped create 4.5m jobs. “That’s the reality, the rest is speculation." In other remarks, Draghi said it was "up to the eurozone countries to prepare for the end of quantitative easing".
