ECB’s Praet: Interest rates to remain low for an extended period of time

Speaking at an event in Madrid, ECB’s chief economist Peter Praet noted that the central bank is expected to keep the interest rates low for an extended period of time, Reuters reports.

Key Quotes:

“The return on equity of significant Euro area banking groups still remains well below their cost of capital“

“Newfound bank resilience will come under pressure if the slump in profitability persists”

“Market valuations point to an expectation of subdued earnings prospects going”

“Further signs of banking weakness have emerged in response to the different episodes of financial market turbulence since the start of 2016”

“Constellation of very low interest rates will probably prevail for an extended period of time”

“The relatively subdued growth outlook is also expected to weigh on credit demand and hence income growth from loan”

“The slump in bank profitability is not, a concern for policymakers“

“Interest rates to remain low for an extended period of time”

“ECB will preserve its accommodative stance until inflation returns to our aim”

“Our assessment is that at this stage monetary policy has supported banks' profitability”

“The longer low interest rates persist, the greater the challenges for the banking sector“