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Lagarde: This Is Not A 2008 Banking Crisis

ECB

Q: In July 2008 the ECB increased rates just before the financial crisis. Is the ECB at risk of making the same mistake? It takes a long time for interest rate hikes to go through the economy. Given the uncertainty is there not a case for slowing down in the next few meetings?

  • A1: The banks are in a completely different situation than in 2008. Crises are different. The banking infrastructure has been significantly improved. The decision we took today was needed and robust. In the future we will be data dependent.
  • A2: We are beginning to see a good transmission of our monetary policy in the credit sector. This is not the end. It takes some time.

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