During last week’s monthly press conference, ECB President Mario Draghi made clear that the bank will loosen monetary policy in June saying that the “the governing council is comfortable with acting next time, noted Euler Hermes analysts, which expect interest rate cuts as a first step.
For the second half of the year, the analysts predict deeper unconventional measures such as purchase of private assets.
“The ECB is skeptical that quantitative easing as soon as June will lead to increased bank lending to the real economy as banks need to show improved financial strength within the Asset Quality Review (AQR) and Stress Tests, results of which will be published in October/November,” writes the report.
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