ECB’s Stournaras: ‘We Are Close to the End of the Tightening Cycle’
20 March 2023
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Monday said that the ECB was nearing the end of the hiking cycle.
In an interview with CNBC, Stournaras, who heads the Bank of Greece, said, ‘I think the rate hikes are mostly now a story of the past. I think we are close to the end of the tightening cycle, so, to be honest, I do not believe that there is going to be a problem, in the Greek or in the European banking system.’
Stournaras appeared to defend the Governing Council’s decision last Thursday, arguing that ‘[w]e have given forward guidance that there was going to be a rate hike of 50bp last week, and this is what we did.’
There will be no more forward guidance, however, he continued, with decisions strictly data-driven instead.
Europe’s banking system was ‘well-equipped with capital, with liquidity’, its authorities ‘much wiser than they were ten years ago with the crisis’, he insisted. There were no ‘substantial vulnerabilities’ in the system, and the risk of contagion was ‘very small’, he said.
Policymakers are thus at the ready, he said. ‘But I think that the banking system in Europe is in a much, much better condition today and it is resilient’, he said.