Lagarde Affirms that No Discussions Taken Place on Active APP Sales

Lagarde continues:

• On banking sector: Stronger tier 1 equity in banks, macroprudential buffers and balance sheet improvements make institutions stronger, banks are faring well across 2022 and 2023 on improved profitability, but warns that this tailwind might change, and banks should be aware of these risks
• On government borrowing costs: am uncomfortable with fact that fiscal framework not yet agreed. It is politically difficult, but if fiscal governance framework not in place, there is a lack of understanding how finance ministers will plan for debt trajectories, fiscal management etc.
• Was reassured by this week's ECOFIN progress, with Germany & France working hard together. Hopes for agreement by year-end.
• On the topic of ECB balance sheet: We have made no decisions, have had no discussions and no decision is "in the making" on active APP sales. On PEPP we are continuing to reinvest, and decisions will be made whether we move into a "run-off" mode for this tool.
• Climate finance and digital EUR questions round off the fireside chat.