KBRA Releases Research Report, “Changing of the ECB Guard”

NEW YORK--()--As favourable macro conditions in the Eurozone spark a vibrant debate on the timing of the European Central Bank’s (ECB) turn towards monetary policy tightening, major changes in the Bank’s key personnel are imminent. Four of the six-member Executive Board will be replaced in 2018-2019, and one more early in 2020. This window coincides just about perfectly with the economic cycle. Europe is becoming ripe for monetary policy normalisation -- more conventional interest rates (as compared to negative deposit rates) and divestment from the expansive quantitative easing (QE) program.

“Doves,” who have been in place on the ECB Executive Board since the crisis period, have served the loose monetary policy framework of recent years well. These policies were critical to stabilising the financial markets and helping beleaguered economies rebuild. As the bloc’s macro conditions are increasingly suitable for a tightening stance, the possible changing of the guard towards a significantly more “hawkish” tone does raise eyebrows about the durability of the Eurozone’s economic recovery. Credit growth remains lacklustre and inflation persists at below target rates. This commentary discusses these imminent staffing changes and the macro backdrop on the bloc.

Please click here to access the full report.

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About KBRA and KBRA Europe

Kroll Bond Rating Agency, Inc. is a full service credit rating agency registered with the U.S. Securities and Exchange Commission as an NRSRO. In addition, Kroll Bond Rating Agency, Inc. is recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and a certified Credit Rating Agency (CRA) by the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe Limited is registered with ESMA as a CRA.

Contacts

Analytical:
For Kroll Bond Rating Agency, Inc.
Joan Feldbaum-Vidra, Managing Director, Sovereigns
New York
646-731-2362
jfeldbaumvidra@kbra.com

Contacts

Analytical:
For Kroll Bond Rating Agency, Inc.
Joan Feldbaum-Vidra, Managing Director, Sovereigns
New York
646-731-2362
jfeldbaumvidra@kbra.com