{"id":47842,"date":"2016-08-31T11:40:24","date_gmt":"2016-08-31T16:40:24","guid":{"rendered":"https:\/\/selasite.azurewebsites.net\/praet-encouraged-by-euro-area-resilience-after-brexit-vote\/"},"modified":"2016-08-31T11:40:24","modified_gmt":"2016-08-31T16:40:24","slug":"praet-encouraged-by-euro-area-resilience-after-brexit-vote","status":"publish","type":"post","link":"https:\/\/rmtsolutions.net\/sela\/praet-encouraged-by-euro-area-resilience-after-brexit-vote\/","title":{"rendered":"Praet Encouraged by Euro-Area Resilience After Brexit Vote"},"content":{"rendered":"

The euro-area economy is showing\u00a0\u201cencouraging signs of resilience\u201d<\/strong> following the U.K.\u2019s shock decision to leave the European Union,<\/strong> European Central Bank Executive Board member Peter Praet said on Wednesday.<\/p>\n

\u201cThe data have been almost if you hadn\u2019t gotten anything with the British exit,\u201d Praet, the ECB\u2019s chief economist, said in a Bloomberg interview in Beijing. \u201cWe\u2019ve been very careful about not drawing hasty conclusions about the referendum in the U.K. and so far we are proven right to say let\u2019s observe a little bit how it goes, and you will see with the projections.\u201d<\/p>\n

The ECB will set monetary policy on Sept. 8, when it will assess the impact of the U.K. vote on the euro area\u2019s gradual recovery and publish revised economic forecasts for the currency bloc. While the Brexit impact so far has been limited, Praet cautioned a lot was riding on the outcome of two-year negotiations<\/a>, which haven\u2019t even started.<\/p>\n

Negative Rates<\/strong><\/p>\n

Earlier, Praet joined his colleague and Governing Council member Francois Villeroy de Galhau in defending the central bank\u2019s current strategy of negative interest rates and large-scale asset purchases, which has drawn criticism that it\u2019s distorting markets. Deutsche Bank AG Chief Executive Officer John Cryan has been among those calling on policy makers to change course as the side effects of the policy are hurting banks.<\/p>\n

Asked about policy options the ECB will consider at its upcoming meeting, Villeroy de Galhau pointed to the policy package the central bank presented in March.<\/p>\n

\u201cOur priority has been since to implement this comprehensive package in the best possible way,\u201d he said. \u201cThis is what we are doing. It is powerful, it is efficient,\u201d and \u201cit is developing in a smooth way and a quite satisfying way.\u201d<\/p>\n

The ECB\u2019s framework incorporates \u201cimportant safeguards to prevent an overly narrow and zealous interpretation of price stability from becoming a source of financial instability,\u201d Praet said in the text of a speech in Beijing on Wednesday. The central bank will \u201cexercise caution\u201d with the instruments it chooses, Villeroy de Galhau said at an earlier event in Frankfurt.<\/p>\n

While the ECB was monitoring the impact of its monetary stimulus on financial stability, governments and regulators must also play their part in preventing imbalances, they said.<\/p>\n

Praet also pushed back against the charge that the central bank\u2019s ultra-accommodative stance could allow the buildup of risks such as asset-price bubbles, saying it effectively leans against the wind.<\/p>\n

Flexible Horizon<\/strong><\/p>\n

\u201cThe representation of monetary policy as focusing on a short policy horizon and with little regard for broader financial cycles does not do justice to the strategies that many central banks follow today, and certainly not to the strategy of the ECB,\u201d Praet said. \u201cThe ECB follows a flexible medium-term horizon and, as part of its two-pillar strategy, closely monitors the dynamics in money and credit which may act as signals for the build-up of financial imbalances.\u201d<\/p>\n

Praet and Villeroy both\u00a0said they believe the central bank\u2019s current stimulus is warranted, and urged other actors to take suitable measures to support monetary policy while safeguarding financial stability.<\/p>\n

Figures published Wednesday showed euro-area inflation was unchanged at 0.2 percent in August, and unemployment held at 10.1 percent in July. Both numbers were weaker than economists\u2019 estimates.<\/p>\n

\u201cMonetary policy of course plays an important role, because it secures the monetary stability necessary for economic growth,\u201d Villeroy said. \u201cBut monetary policy alone is not enough.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"

Praet Encouraged by Euro-Area Resilience After Brexit Vote<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[23],"tags":[],"class_list":["post-47842","post","type-post","status-publish","format-standard","hentry","category-boletines-regionales"],"acf":[],"_links":{"self":[{"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/posts\/47842","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/comments?post=47842"}],"version-history":[{"count":0,"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/posts\/47842\/revisions"}],"wp:attachment":[{"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/media?parent=47842"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/categories?post=47842"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/rmtsolutions.net\/sela\/wp-json\/wp\/v2\/tags?post=47842"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}