March 12, 2020

ECB delivers bold measures but sees the ball primarily in the field of fiscal policy

ECB delivers bold measures but sees the ball primarily in the field of fiscal policy

Market Commentary
12/03/2020

Highlights:

Today the ECB delivered a comprehensive policy package consisting of additional LTROs,
TLTRO III targeting SMEs, a temporary increase of QE by cumulatively € 120 bn skewed
towards CSPP until year-end and some regulatory easing for banks. It refrained from cutting
the deposit rate.
The Covid-19 shock is seen as temporary and monetary policy makers look for a V-shaped
development, while seeing the risks clearly tilted to the downside.
The Governing Council, however, sees the ball for supporting measures in the field of
governments and urged for “ambitious and coordinated fiscal policy response”.
Looking ahead, only in case of a longer lasting crisis the ECB would probably think about
additional policy measures.

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ECB DELIVERS BOLD MEASURES BUT SEES THE BALL PRIMARILY IN THE FIELD OF FISCAL POLICY

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