ECB’s Stournaras: ‘Definitely Close to the End’ of Hiking

2 April 2023

By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Yannis Stournaras on Sunday said that the ECB was nearly at the end of the hiking cycle.

In an interview with Greek weekly Proto Thema, Stournaras, who heads the Bank of Greece, said, ‘I think we're getting close to the end. If it's still 25 points, I can't say right now. We have said not to give any direction yet because it will depend on developments, but especially after recent events I now feel we are close to the end. I cannot say we are at the end, that it is over, but we are definitely close to the end.’

There was no question of regarding price stability and financial stability separately, he said. ‘We cannot put one above the other’, he said. ‘They go together.’

The turmoil in the banking sector did not portend a crisis like the last one, he insisted.

‘Look, both European banks and Greek banks are nothing like the banks we had during the crisis’, he said. ‘They are adequately capitalized, to a very large extent, liquidity is very high, supervisors are much wiser, the tools are much more, the European Central Bank has said "urbi et orbi" that it has all the tools available - if necessary - to use them.’

‘So I can therefore say with quite a lot of confidence, with a lot of confidence, that we are not in danger of speculative pressures’, he continued. ‘And I say pressures because when banks are adequately capitalized, when we have the liquidity that we should have, there are no fundamentals that justify speculation. So for those who speculate - we have seen this phenomenon in the CDS market in the last few days - the European Central Bank is prepared to do "whatever it takes" and I think the effect will be catalytic.’

With respect to Greece regaining investment grade, anticipated for this year, ‘I give no chance that we don't get it, no chance’, he said.