February 18, 2025 14:40 GMT
MNI BRIEF: Bank Demand Key For Balance Sheet - ECB's Cipollone
ECB executive board member Piero Cipollone speaks in an MNI Connect livestreamed event.
MNI (ROME) - Banks demand for liquidity will set the size of the European Central Bank’s balance sheet, Executive Board member Piero Cipollone told an MNI Connect livestreamed event on Tuesday
“There are exogenous factors that will determine how much liquidity banks need,” he said, adding that the ECB will accommodate banks’ demand using its “large toolkit.” (See MNI: ECB Rate Shift Gives Added Focus To Deposit Facility Rate)
The level of the balance sheet is is not "on autopilot, because banks do not have their own internal liquidity requirements that they set you know, to manage liquidity risks, and this make extremely difficult for us to to forecast the optimal point," he said.
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