US, WASHINGTON (ORDO NEWS) — The European Central Bank is ready to take further measures to support the eurozone-affected economy, the ECB said Wednesday, trying to dispel growing fears that the regulator has exhausted all of its tools.
The ECB agreed on a wide range of incentive measures last week, but markets questioned whether the central bank had any powerful tools in reserve in the event of a deepening crisis due to coronavirus.
These concerns were reinforced by the head of the Austrian central bank, Robert Holtzmann, who in an interview suggested that monetary policy was at its limit and the ECB would not be able to meet market expectations.
Holtzman, a member of the Governing Council of the ECB, then seemed to refute his own words by issuing a short statement saying that monetary policy “in no way” has reached its limits.
The ECB said on Wednesday that it’s “ready to adjust all its measures, if necessary, if necessary to protect liquidity conditions in the banking system and ensure the uninterrupted transfer of monetary policy in all jurisdictions.”
The regulator will be ready to take decisive action if necessary, and it has at its disposal instruments that are more effective than conventional monetary policy measures, said ECB Vice President Luis de Gindos.
The ECB is lowering its growth forecast, and the likelihood of a recession has increased significantly due to coronavirus, but the regulator is ready to act quickly, said Isabel Schnabel, a member of the central bank’s executive board, in an interview with the German newspaper Die Zeit.
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