Fiscal-Monetary Conflict Bigger Concern Than Financial Risks From ECB Rate Hikes, de Guindos Says
23 May 2023
By Xavier D’Arcy – FRANKFURT (Econostream) – European Central Bank Vice President Luis de Guindos said on Tuesday that the conflict between monetary and fiscal policies concerned him far more than financial stability risks stemming from rate hikes.
When asked about the interaction between monetary policy and financial stability at a conference on European financial integration, he said that ‘so far, even with the monetary policy decisions that we have taken, we have not seen any sort of negative feedback in terms of systemic risk.’
Rather than the conflict between monetary policy and financial stability, he said he was ‘much more afraid of the potential conflict between fiscal and monetary [policy], this is something we have to look at very carefully in future.’