16 Jul 2014
ECB's Nowotny: Low growth and inflation the new normal
FXStreet (Łódź) - ECB Governing Council Member Ewald Nowotny said on Wednesday during a lecture at a lecture at Frankfurt University that growth in the Eurozone remains sluggish and inflation low.
"The new normal is a situation where we have low economic growth, low inflation, but also for the banks lower profitability, lower asset quality and less short-term funding," he said.
The ECB policymaker stressed that the central bank needs an active monetary policy to address these threats and use macroprudential tools to offset the side effects of keeping rates low for an extended period of time.
The Governing Council is discussing an ABS program with an open outcome, he signaled, adding however that it was not certain whether it would be implemented at all.
Furthermore, he declared that bank stress tests to be carried out in Europe will be much harder than the ones conducted in the US.
"The new normal is a situation where we have low economic growth, low inflation, but also for the banks lower profitability, lower asset quality and less short-term funding," he said.
The ECB policymaker stressed that the central bank needs an active monetary policy to address these threats and use macroprudential tools to offset the side effects of keeping rates low for an extended period of time.
The Governing Council is discussing an ABS program with an open outcome, he signaled, adding however that it was not certain whether it would be implemented at all.
Furthermore, he declared that bank stress tests to be carried out in Europe will be much harder than the ones conducted in the US.