ECB: See you in September – BNPP

Research Team at BNP Paribas, suggests that the ECB is maintaining the monetary status quo and the central bank esteems that the Brexit victory increases the downside risks to European growth, but that it is still too early to assess the precise effect.

Key Quotes

“Mario Draghi gives a rendezvous in September when the ECB will present its updated macroeconomic projections. M. Draghi reiterated the ECB’s “readiness, willingness ability” to act if needed, emphasising the availability of all instruments within its mandate.

The press conference was dominated by questions on the parameters of the Public Sector Purchase Programme (PSPP) and the situation of banks, notably in Italy.

Without going into detail, M. Draghi said the central bank had shown flexibility so far in meeting its monthly purchasing targets.

As to the Italian banks, M. Draghi said he was in favour of a public backstop under exceptional circumstances to avoid fire sale, while letting the decision up to the European Commission.”