ECB purchase of assets stimulate lending in Eurozone

Noam Stiekema

The European Central Bank said that its program for the purchase of assets stimulate lending in the Eurozone, although some European lenders are experiencing considerable difficulties. ECB started buying private assets last year and expand the program in March, including government bonds to revive inflation. In its bank lending survey for the first quarter of […]

Eur

EurThe European Central Bank said that its program for the purchase of assets stimulate lending in the Eurozone, although some European lenders are experiencing considerable difficulties. ECB started buying private assets last year and expand the program in March, including government bonds to revive inflation. In its bank lending survey for the first quarter of 2015, released Tuesday, the Frankfurt-based institution said that the strategy is already having an impact.

“The banks of the euro area suggest that use the additional liquidity from their sales of marketable assets associated with the program, especially for lending. The program to buy assets seems to be effective in supporting lending to the economy of the Eurozone”, said ECB.

ECB President Mario Draghi said that the institution plans to spend 60 billion EUR per month until at least September 2016, which will raise prices for consumers and boost the supply of credit. Yet almost one fifth of the region’s banks expect profits to retreat due to the decline in net interest margins. The central bank will hold monetary policy meeting in Frankfurt on Wednesday to assess the quantitative easing strategy.

In Germany, where the Bundesbank and its President Jens Vaydman led opposition to large-scale bond purchases, almost no bank intends to sell assets according to a national survey released Tuesday. German lenders also indicated that the program does not expect the ECB’s quantitative easing have some impact on credit standards. The survey among Eurozone showed that 28% of banks in the region use the additional liquidity to provide loans to businesses. 17 percent said they use the funds for mortgages and 18 percent – for consumer credit and other loans to households.

Most banks said they also intend to use the additional liquidity to increase lending in these categories over the next six months. Almost half of the banks surveyed, even said that the program for the purchase of assets had a positive effect on their conditions of market financing. However, a net 18% of Eurozone banks have stated that the program will have a negative impact on their profitability over the next six months.

Read this next

Digital Assets

Ripple and Lithuanian FINCI partner for XRP-based payments

Ripple is looking to expand its presence in Europe, forming a new partnership with Lithuanian electronic money institution FINCI.

Digital Assets

Crypto.com enables Shopify merchants to accept crypto payments

Crypto.com has integrated with Canadian e-commerce giant Shopify so global merchants can accept crypto payments and save on processing fees through cash-final settlements.

Institutional FX

FX volume drops 13pct at CLS Group in April 2022

FX settlement specialist CLS Group today reported that the executed volumes of currency trading on its platforms were notably down in April.

Crypto Insider, Opinion

Regulation: The Gold-Standard for Crypto-Assets

When the US supervisory authority SEC allowed an investment product referencing Bitcoin futures to be traded for the first time last October, this was widely perceived as a signal that cryptocurrencies had finally become established as an asset class.

Executive Moves

Solid hires FX industry veteran Darren Barker for multi-bank ECN’s business development

His curriculum vitae includes former roles at Cantor Fitzgerald, Sucden Financial, R.J. O’Brien, Jefferies, Natixis, Unicredit, J.P. Morgan, Raiffeisen, RBS International, UBS, Deutsche Bank, and Citi. 

Inside View

Mihails Safro, xpate CEO: Tips sellers need to know to overcome compliance obstacles

The unprecedented growth of e-commerce changed shopping dramatically last year. Many sellers suddenly faced a rapidly growing number of customers who had to stay home during the lockdown. When some clients adopted Netflix and Spotify as part of a daily routine, others ventured into online business. Robinhood alone saw a whopping 6 million rise in user numbers in 2 months. 

Institutional FX

BMLL delivers Level 3 data to Kepler Cheuvreux for order book analytics and algo performance

The solution covers more than 6.5 years of harmonised historical data from 65 venues and combines it with easy to use APIs and analytics libraries in a secure cloud environment. 

Digital Assets

Crypto Is An Invaluable Tool In The Fight Against Financial Oppression  

Crypto has proven itself to be much more than just a hot investment. Indeed, some say it’s poised to play a critical role in the future of finance

Executive Moves

Parameta appoints Head of Benchmark and Indices with a focus on ESG and rates

The firm said building out its benchmarks & indices offering will now be a core priority, with a particular focus on the ESG and rates space.

<