ECB: a rate cut is the most likely outcome in the upcoming meeting
ECB: a rate cut is the most likely outcome in the upcoming meeting
Global & Regional Focus Notes
30 Απριλίου 2013
• However, conventional monetary easing is unlikely to have a meaningful impact on the euro area economy. In periphery countries, a lower policy rate is unlikely to translate into lower lending rates due the broken monetary transmission mechanism. In core countries, money market rates are unlikely to move substantially due to abundant liquidity.
• The periphery needs targeted unconventional monetary measures to overcome the credit crunch. However, in the current economic and political context it is easier to build consensus for a rate cut than for credit easing measures that entail a distribution of credit risk.
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