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The European Central Bank director sees the biggest problem in the US

In US banks, massive outflows of deposits from banks have been a topic of discussion recently and have caused uncertainty. In Europe, the situation appears to be more stable, European Central Bank Managing Director Isabel Schnabel stressed in a speech in Washington.

Eurozone banks appear to have suffered minor deposit losses during the turmoil of recent weeks and uncertainties surrounding financial stability. “Our banks seem to be very resilient. In general, I would say we have a slightly smaller problem than in the US,” said the ECB Executive Board member. Isabelle Schnabel Wednesday at an event for the National Association for Business Economics in Washington.

“We have seen some shift from overnight deposits to time deposits, but we have not seen a general influx of bank deposits,” the agency said. «Bloomberg» (paid article) quoted. “There’s been a lot of analyses, all of them coming to the conclusion that the capitalization looks reasonably good, and the liquidity position looks good.”

Anti-inflammatory effect

There could still be a certain tightening in the credit environment on this side of the Atlantic and that will have an “anti-inflationary” effect, that is, anti-inflationary, to watch. It is not yet possible to estimate the magnitude of this effect.

Core inflation is stubbornly high

The biggest concern for the ECB remains high inflation. Above all, core inflation, which is still on the rise, has proven to be more consistent than expected. According to Schnabel, the rise in energy prices over the past year has had a very rapid impact on the entire economy. However, this effect will likely not be released again anytime soon. “This is one of the factors explaining why core inflation is more elastic,” she said.

According to Schnabel, the ECB has some leeway to hit its 2 percent inflation target. “I would say we have a little bit of flexibility in our case,” she said. “Our goal is defined as a medium-term goal, so of course we don’t want to cause any unnecessary pain.”

Core inflation in the euro zone fell to 8.5 percent in February from 8.6 percent in January. However, the core rate rose to 5.6 percent from 5.3 percent previously.

Does the new “Monster-UBS” have a chance of success?

  • Yes, you will emerge stronger from the banking crisis.

  • Yes, as long as you break up investment banking.

  • Yes, but only on your own.

  • No, this giant is too big for Switzerland.

  • No, because the traditional universal banking system is over.