You are here: Home » Reuters » News
Business Standard

ECB to debate new cheap loans amid 'fragile and fluid' outlook: minutes

Reuters  |  FRANKFURT 

(Reuters) - policymakers gathering in December suggested revisiting the use of cheap, multi-year loans to banks in the months ahead and sparred on the outlook for the zone's economy, minutes of the meeting showed on Thursday.

The ECB wrapped up its 2.6 trillion ($3.00 trillion)bond purchases at the Dec. 12-13 meeting but ECB couched his policy message in warnings about growing risks and weaker economic data.

Minutes of the discussion suggested some policymakers would have liked Draghi to be even more cautious and at least some called for a discussion on a new round of cheap credit to banks -- a key source of funding for lenders in Italy, and

This confirmed reports and was likely to cement market expectations for a new Targeted Long-Term Financing Operation, one of the ECB's most potent stimulus tools, in some form in the coming months.

"Looking ahead, the suggestion was made to revisit the contribution of targeted longer-term refinancing operations to the monetary policy stance," the ECB said in its account of the December meeting.

Some rate setters called for the ECB's policy message to say that risks to economic growth in the area were "tilted to the downside" -- a phrase that has in the past signalled easier policy ahead.

In the end the ECB opted for a compromise solution, where risks were described as being balanced but "moving to the downside". But the minutes laid bare a cautious attitude among rate-setters.

"It was underlined that the situation remained fragile and fluid, as risks could quickly regain prominence or new uncertainties could emerge," the ECB said in the minutes.

($1 = 0.8670 euros)

(Reporting By Francesco Canepa; Editing by Toby Chopra)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, January 10 2019. 18:34 IST
RECOMMENDED FOR YOU