ECB Still Has a Lot of Work to Do Fighting Inflation, Knot Says
23 March 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Governing Council member Klaas Knot said on Thursday that there was still a lot of work to do fighting high inflation in the Eurozone.
Speaking at a press conference in Amsterdam, Knot, who heads De Nederlandsche Bank, said the ECB will stay the course and continue to do everything it can as it battles stubbornly high inflation.
‘Underlying inflation […] is remaining elevated for too long’, he said. ‘So the ECB still has a lot of work to do.’
‘The best thing you can do as a central bank in the face of uncertainty is to stay the course’, he said. He told journalists that the ECB ‘needs to do more to tackle inflation’ and it would ‘continue to do everything it can to bring inflation back down to the 2% target.’
The Dutch government’s fiscal support packages risked fuelling inflation, he said: ‘expansionary fiscal policy also boosts inflation […] support measures should therefore be targeted at those most affected – and stay within fiscal rules.’
Knot, who also heads the Financial Stability Board, said that ‘rapidly rising interest rates are a threat to financial stability, as we have seen in recent weeks.’
He noted, however, that ‘banks are many times more resilient today than they were during the financial crisis.’ Commercial banks ‘hold more and better capital, and there is more than enough liquidity’, he said.