ECB is closely monitoring the bank lending channel – Danske Bank

Research Team at Danske Bank, notes that at the latest ECB meeting, President Mario Draghi said the transmission of the monetary policy had ‘never worked better’, but recently a lot of focus has been on weakness in the banking sector.

Key Quotes

“The minutes from the latest ECB meeting also revealed some concern about the banks as it was concluded that ‘developments in the bank lending channel deserved close monitoring’.

Additionally, the minutes stated that the continued underperformance of bank equity prices ‘might contain a cautionary signal for future loan growth’.”