Christine Lagarde, President of the ECB. HEIKO BECKER / REUTERS
This is the second time this week that this body has been convened for an “ad hoc” meeting..
The European Central Bank (ECB) is meeting its supervisory body for banks in the euro zone on Friday for a “exchange of viewson the banking sector after the turmoil of the past few days. “The Supervisory Board meets to discuss and take stock of recent developments in the banking sectorsaid an ECB spokesperson.
This is the second time this body has been convened this week for a meeting.to this», outside the usual timetable, given the rapid developments affecting the banking sector. No decision should come out at this stage of this exchange which involves a good twenty participants including Andrea Enria, president of the single supervisor of the big banks of the euro zone, housed since 2014 within the ECB.
The ECB’s Supervisory Board is a separate body from the Governing Council responsible for monetary policy decisions, which held its regular meeting on Thursday. The president of the institution, Christine Lagarde, does not participate. The banking turmoil did not prevent the European Central Bank from continuing its fight against inflation by raising its rates by 0.5 percentage points as planned on Thursday.
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Signs of calm
Since March 10, the bankruptcy of the SVB and two other American regional banks have revived the specter of the 2008 financial crisis which had destabilized the world economy. The financial markets in Europe and Asia showed signs of calm on Friday after the aid provided to several American banks and to Credit Suisse, a Swiss establishment also destabilized this week.
On Thursday, ECB President Christine Lagarde insisted that the banking sector in the euro zone is “in a much stronger position than in 2008“, adding that the ECB has all the tools at its disposal to act”if necessary“. At his side, the Vice-President of the ECB, Luis de Guindos, explained that the capital of the big banks in the euro zone is “much higherthan it was before the global financial crisis.
Another piece of evidence is that closely monitored ratios of liquid assets on the balance sheet to net cash outflows are “clearly above the minimum requirements (more than 160% at the end of 2022, for a minimum of 100% required, Editor’s note)“, he continued. French and European banksare extremely strong“, also said Friday the governor of the Banque de France François Villeroy de Galhau.