ECB focuses on a decentralized financial system
The European Central Bank (ECB) seeks the best strategies to avoid an absolute financial crisis in Europe
The 25 members of the Governing Council of the European Central Bank will meet in Lithuania next Thursday and will face a difficult dilemma of how to reduce the risks of an economic slowdown and avoid destabilizing side effects in European banking and finances.
For their part, most economists predict that the ECB will leave the benchmark policy rate at zero and will try to inject an additional monetary stimulus by offering regional banks generous terms in the next long-term loan program.
Mario Draghi, head of the European Central Bank, is expected to reveal the details of the loan program. While the manager of the monetary policy of the Eurozone offers generous terms with a rate that is below -0.25% or less.
The announced measures can stimulate loans and boost commercial and consumer activity in the economy.
However, the institution will do nothing to alleviate the pain of a negative deposit rate that will continue to paralyze the profit margins of banks and causing pain to the European banking sector.
In the same way, by trying to stimulate the loans the ECB could be effectively destroying the banking system that is already weakened by financial crises and unbalanced business models.
L.Sáenz
Source: Criptoinforme
