Luis de Guindos: Interview with Business Post
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Thursday, March 30, 2023
Exercise, Uncertainty, European Central Bank, Addition Financial, Industry, European Banking Authority, Communication, Policy, Silicon Valley Bank, ESRB, European Commission, Finance, Frankfurt, Credit Suisse, Government, Projection, Silicon, GDP, Risk, Opacity, ECB, Sound, Financial Stability Board, G20, Growth, ESMA, Business Post, Remuneration, Reproduction, GNP, IMF, Common, Bank, Renewable energy, Cryptocurrency, Risk management, Agriculture, Blow molding, Creative industries, Security printing, Security (finance), EU, European
Secondly, looking at the macroeconomic situation, there are no problems with respect to the competitiveness of European economies.
Key Points:
- Secondly, looking at the macroeconomic situation, there are no problems with respect to the competitiveness of European economies.
- For example, the balance of payments in Spain, Greece, Ireland, or Portugal are in a much better position.
- It was a sort of whatever it takes in fiscal policy while monetary policy was very supportive too.
- We have other difficulties now, but these can be addressed more easily than during the great financial crisis.
- Are you more optimistic about Europe’s economic outlook than you were in the latter half of last year?
- Nevertheless, growth numbers weren’t great, hovering around 1 per cent, while inflation was clearly more positive, especially headline inflation.
- The question now is how the events in the US banking system and Credit Suisse will impact the euro area economy.
- Over the next weeks and months, we need to assess whether they will give rise to an additional tightening of financing conditions.
- So you are more optimistic about the inflationary environment, but things have changed with regards to financial stability?
- Our impression is that they will lead to an additional tightening of credit standards in the euro area.
- And perhaps this will feed through to the economy in terms of lower growth and lower inflation.
- Do you have a time period within which you want to see that realistically happen?
- We know it cannot be tomorrow, but it has to be within our projection horizon, which is a period of two years.
- In the case of the US, Silicon Valley Bank had quite a unique business model.
- *Ireland has seen an exit of domestic banks in recent years, and we are now down to two main pillar banks.
- Because if you have for instance numerous players which are not very active or are weak, then that competition isn’t real.
- *
My personal view is that the period of negative interest rates is over, at least in the medium term.