Factbox: Key ECB feedback on rising yields forward of coverage assembly
FRANKFURT (Reuters) – The next are key quotes from European Central Financial institution policymakers on current volatility in sovereign bond markets forward of Thursday’s coverage assembly.
CHRISTINE LAGARDE, PRESIDENT OF THE ECB, FEBRUARY 22
“The ECB is intently monitoring the event of longer-term nominal bond yields.”
FABIO PANETTA, MEMBER OF THE COUNCIL OF THE ECB, 2 MARCH
“The steepening of the nominal GDP-weighted yield curve that we’re seeing will not be welcome and have to be fought.
“Don’t hesitate to extend the amount of purchases and spend all the PEPP envelope or extra if essential. On this approach, we are able to keep away from a tightening of the financing circumstances.
“It could be tempting to conclude that there’s much less want for financial coverage help. However I’ll argue at present that we should resist this temptation.
“Proper now, the dangers of offering too little political help nonetheless far outweigh the dangers of offering an excessive amount of.”
PHILIP LANE, CHIEF ECB ECONOMIST, FEBRUARY 25
“The 2 fundamental yield curves within the euro space for the financing circumstances of all sectors of the financial system are the in a single day index swap curve – an indicator of a risk-free curve within the euro space – and the GDP-weighted sovereign bond yield curve. It’s essential to make sure that the risk-free yield curve stays at very accommodative ranges.
“Consequently, the ECB is intently monitoring the event of longer-term nominal bond yields.
ISABEL SCHNABEL, MEMBER OF THE COUNCIL OF THE ECB, FEBRUARY 26
“An increase in nominal yields that displays rising inflation expectations is a welcome signal that the coverage measures are paying off. Even gradual will increase in actual returns are usually not essentially a trigger for concern in the event that they mirror enhancing prospects for progress.
“Nonetheless, an increase in long-term actual charges within the early phases of the restoration, even when it displays higher progress prospects, might withdraw very important political help too quickly and too abruptly given the nonetheless fragile state of the financial system. financial system. The coverage will then have to extend its degree of help.
FRANCOIS VILLEROY DE GALHAU, HEAD OF THE FRENCH CENTRAL BANK, MARCH 1
“Insofar as this tightening is unjustified, we are able to and should react towards it, beginning with energetic flexibility in our PEPP purchases,
“We’re decided to take care of, for so long as essential, a really accommodating financial stance.”
PABLO HERNANDEZ DE COS, HEAD OF THE SPANISH CENTRAL BANK, MARCH 3
“The will increase in nominal long-term rates of interest haven’t been accompanied by related will increase in long-term inflation expectations … This could have a detrimental impression on financial exercise and due to this fact on the financial system. ‘inflation.
“These developments underline the significance of avoiding untimely will increase in nominal rates of interest.
YANNIS STOURNARAS, CHIEF OF THE GREEK CENTRAL BANK, FEBRUARY 26
“In my view, there may be an unwarranted tightening in bond yields, so it could be fascinating for the ECB to step up the tempo of PEPP purchases to make sure favorable financing circumstances in the course of the pandemic.
“In my view, there is no such thing as a elementary justification for tightening nominal bond yields over the long run.”
KLAAS KNOT, HEAD OF THE DUTCH CENTRAL BANK, 4 MARCH
“I feel the start line needs to be that the speed hike displays higher progress prospects and better inflation expectations, which in itself is constructive.”
Report by Balazs Koranyi; Edited by Chizu Nomiyama