Ahead of the ECB: Responding to coronavirus

Ahead of the much-anticipated ECB policy meeting on 12 March, Danae Kyriakopoulou, OMFIF’s Chief Economist and Director of Research, speaks to former Governing Council Member and Central Bank of Cyprus Governor Panicos Demetriades and Bank of America Merrill Lynch Research Analyst Alastair Ryan on the economic impact of Covid-19 and expectations for the ECB’s response to the shock. They discuss banks’ preparedness to economic shocks, the potential impact of a rate cut on bank profitability, and the range of measures at the ECB’s menu including expanding quantitative easing and making use of its expanded supervisory role through supervisory forbearance. Finally, they explore the need for fiscal policy and discuss the options for optimising the fiscal-monetary policy mix to respond to economic shocks.

 

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