Too soon to discuss new ECB stimulus package - Constancio

Record ID: 102220

  • Title: Too soon to discuss new ECB stimulus package - Constancio
  • Date: 24th May 2016
  • Summary: FRANKFURT, GERMANY (MAY 24, 2016) (REUTERS) EXTERIOR OF EUROPEAN CENTRAL BANK (ECB) ECB VICE PRESIDENT, VITOR CONSTANCIO, ARRIVING FOR PRESENTATION OF ECB'S FINANCIAL STABILITY REVIEW (FSR) VARIOUS OF ATTENDEES LISTENING TO CONSTANCIO PRESENTING FSR CONSTANCIO WALKING OUT OF PRESENTATION JOURNALISTS LISTENING TO CONSTANCIO PHOTOGRAPHER (SOUNDBITE) (English) EUROPEAN CENTRAL BANK VICE PRESIDENT, VITOR CONSTANCIO, SAYING: "It's not a matter -- let me underline -- it's not a matter right now of the robustness of the balance sheet of the banks, because capital has been increased, provisions have been increased with all the comprehensive assessments, what is…That is covered. It's not the problem for the banks. The problem from those non-performing exposures is that they are corresponding several banks to a high percentage of total of the balance sheet and that is not well remunerated, because they are non-performing and that affects profitability, it's not about capital or robustness of the balance sheets." JOURNALISTS LISTENING (SOUNDBITE) (English) EUROPEAN CENTRAL BANK VICE PRESIDENT, VITOR CONSTANCIO, SAYING: "As I say, we have been, particular the SSM (Single Supervisory Mechanism) side of the ECB has been working on knowing better the situation, so that objectives, policies can then be defined, countries are also very much aware of the problems and are starting to take measures like recently in Italy and other countries. So we hope that we can indeed solve this problem quicker than just waiting and see what the banks will do on their own." CONSTANCIO TALKING TO JOURNALIST (SOUNDBITE) (English) EUROPEAN CENTRAL BANK VICE PRESIDENT, VITOR CONSTANCIO, SAYING: "Well, we have taken important measures in March, so it's too soon to start indeed thinking about new packages. So let us see what are the effects, as you know very well this sort of measures take time. Some of them have not yet been started to be really implemented with the decisions we took in March, because it takes time in the preparations, so that's where we are and we took this decision of an important package, so we have to see how it will play out." PEOPLE WALKING THROUGH ECB CORRIDOR SEEN THROUGH WINDOW PHOTOGRAPHER / CONSTANCIO VARIOUS OF CONSTANCIO LEAVING
  • Embargoed: 8th June 2016 17:02
  • Keywords: Constancio ECB stimulus package financial stability review
  • Location: FRANKFURT, GERMANY
  • City: FRANKFURT, GERMANY
  • Country: Germany
  • Topics: Economic Events
  • Reuters ID: LVA0014J62FF1
  • Aspect Ratio: 16:9
  • Story Text:It is too early to discuss a further stimulus package by the European Central Bank in response to a worsening of financial conditions, ECB Vice President Vitor Constancio told Reuters on Tuesday (May 24).
    Less than three months after the ECB cut rates and expanded its money-printing programme, some investors are hoping the bank could ease policy further, for example by buying equities.
    But even as the ECB's own Financial Stability Review (FSR) highlighted worsening financial conditions in the euro zone, Constancio dismissed such speculation.
    "We have taken important measures in March so it's too soon to start thinking about new packages," Constancio told Reuters after presenting the ECB's bi-annual Financial Stability Review (FSR).
    Since the November review, the ECB cut one of its interest rates twice and increased the size and scope of its asset-purchase programme to include corporate bonds from next month.
    It also launched a scheme, due to start in June, which will see the ECB pay banks to take its money, provided they pass it on to the economy.
    "Let us see what are the effects. These sorts of measures take time and some have not even been implemented," he added.
    In the FSR, the ECB said financial conditions had become "more challenging" in the past six months, raising risks to the euro zone's moderate recovery.
    It also said risks to the euro zone's financial health had increased over the past six months, with new market turmoil and weak profits for banks and insurers emerging as the key sources of potential trouble.
    Among risks facing the banking sector, the ECB emphasised the high level of bad loans in some countries and it called for lenders and authorities to do more to bring this down.
    Speaking to Reuters, Constancio stressed that banks had sufficient provisions and capital but needed to work off bad loans faster.
    The ECB has launched a task force to look into the issue of non-performing loans, one of its key priorities for the year.
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