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Whoever takes the place of ECB-President Mario Draghi in October will carry a heavy burden, says Philipp VORNDRAN, Chief Markets Strategist at Flossbach von Storch AG.
Whoever takes the place of ECB-President Mario Draghi in October will carry a heavy burden. After a long period of expansion, the economic upswing is threatening to slow down. Since interest rates are at their absolute lowest point, the ECB has little manoeuvring room in the event of an economic downswing. To stabilise the banks, the ECB could grant allowances to exempt part of their deposits from the negative deposit rate. Perpetuating the long-term zero-interest rate TLTRO programme improves bank refinancing and their ability to lend. If the...
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