Coeure: ECB limits might be tested by EU’s upcoming crisis

Coeure: ECB limits might be tested by EU’s upcoming crisis

The European Union isn’t ready for another economic downtime and the next meltdown could have the limits of the European Central Bank tested, thus pushing interest rates further into negative territory. That’s what Benoit Coeure, ECB board member revealed on Friday.

Having fought off the EU’s debt downtime with a 2 trillion euro spending burden, a number of ECB statesmen are worried that governments haven’t succeeded in effectively utilizing their time, unable to fix the EU’s shock absorption capacity, thus leaving it very vulnerable to upcoming shocks.

Arguing that most institutional failings, which provoked the last downtime haven’t been tackled yet, Coeure warned that even a minor downturn could generate huge social and economic costs.

The next meltdown might make the European Central Bank to test the restrictions of its mandate.

Depending on the nature of the approaching hazard, policy action may require pushing short-term rates further into negative territory. Alternatively, the ECB might opt for purchases of assets, which appear to be far riskier than corporate or public debt. It might also get the EU closer to monetary financing of authorities.

In spite of the fact the European Central bank has already tamed its stimulus measures since the climax of the downtime, its deposit rate keeps to a record minimum of -0.4%, the key bank holds over two trillion euros worth of corporate as well as sovereign debt for the purpose of keeping borrowing costs low enough.

Coeure added that flexible markets, in particular an integrated financial market, needs to be the first line of defense. It’s because they are good at absorbing shocks. However, just a minor portion of the European Union's reform proposals have been approved.

A finalized capital markets as well as banking union would diversify and diminish risk by simply restricting the financial burden on authorities and taxpayers.



US Dollar Index at a 3-month Low
US Dollar Index at a 3-month Low

The USD weakened after Fed Chair Powell hinted at a slowdown of rate hikes, and stocks strengthened. What else is moving the markets today?

Soon Bullish Rally for Gold
Soon Bullish Rally for Gold

The winter is coming, and risky markets expect a rally to come with it. Will this December be bullish for stocks, crypto, and gold? A pack of news will surely help you out.

Latest news

China Stocks are About to Jump
China Stocks are About to Jump

It’s Wednesday, my fellow traders! The day is filled with news and events you need to know, and here’re some of them.

Deposit with your local payment systems

Feel the Team Spirit

Data collection notice

FBS maintains a record of your data to run this website. By pressing the “Accept” button, you agree to our Privacy policy.


A manager will call you shortly.

Change number

Your request is accepted.

A manager will call you shortly.

Next callback request for this phone number
will be available in

If you have an urgent issue please contact us via
Live chat

Internal error. Please try again later

Don’t waste your time – keep track of how NFP affects the US dollar and profit!

Beginner Forex book

Beginner Forex book will guide you through the world of trading.

Beginner Forex book

The most important things to start trading
Enter your e-mail, and we will send you a free Beginner Forex book

Thank you!

We've emailed a special link to your e-mail.
Click the link to confirm your address and get Beginner Forex book for free.

You are using an older version of your browser.

Update it to the latest version or try another one for a safer, more comfortable and productive trading experience.

Safari Chrome Firefox Opera