(Finance) – “The ECB will bring inflation back towards 2% between the end of 2024 and the end of 2025: this is a commitment, not just a forecast. So it’s not about giving up now. Although we have completed most of the of our rate-raising journey, perhaps we still have some way to go. After that, we have to stay on course as long as necessary. ” She stated that Francois Villeroy de Galhaugovernor of the Bank of France and member of the governing council of the European Central Bank (ECB), in an interview with the German newspaper Frankfurter Allgemeine Zeitung.
On the possible contrast between further rate hikes and financial stability risks, he said: “For the vast majority of European banks, higher interest rates are beneficial. Unlike SVB, they have a diversified deposit base and do not invest heavily in bonds. As a result, they are not negatively affected by rising interest rates. If, on the other hand, it were necessary to intervene on financial stability, this would be mainly through temporary liquidity facilitiesThat they would not conflict with the rate hike of interest necessary to ensure price stability”.
as for the regulation of banks, to prevent the crises of the past weeks, Villeroy said: “We have already made enormous progress! We can always improve regulation and supervision, but, overall, the Basel III framework and harmonized supervision within the Banking union work strongly in tandem in Europe. We Europeans have learned the lesson from the financial crisis of 2008/2009. We have seen in the US what could happen if supervision remains overly regional and if Basel III is not enforced enough.”