ECB says it has more firepower to fight crisis

MADRID/FRANKFURT: The European Central Bank is ready to take further measures to support the crisis-stricken euro zone economy, it said on Wednesday, attempting to dispel growing concerns that the bank is out of ammunition.
While the ECB agreed on wide range of stimulus measures, markets have questioned whether it has any potent tools left should the coronavirus crisis deepen and the bank is called upon once again.
These concerns were reinforced by Austrian central bank chief Robert Holzmann, who suggested in an interview that monetary policy was at its limits and the ECB could not deliver on market expectations.
Seemingly taking back those comments after a public rebuttal by the ECB, Holzmann, a member of the rate-setting Governing Council, published a short statement to say that monetary policy “has by no means” reached its limits.
In a statement on Wednesday, the ECB said it “stands ready to adjust all of its measures, as appropriate, should this be needed to safeguard liquidity conditions in the banking system and to ensure the smooth transmission of its monetary policy in all jurisdictions.” Reinforcing this message, ECB Vice President Luis de Guindos said the central bank could do more but this was a health crisis not a financial one and governments needed to take charge.
Holzmann’s comments only add to the ECB’s communication headache. It struggled to take back comments from ECB chief Christine Lagarde that the bank was not there to lower bond spreads in the euro zone, a remark that pushed Italian yields sharply higher, irritating policymakers and officials. — Reuters