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MNI BRIEF: Banks Must Pass Rate Hikes On To Deposits - Lagarde

(MNI) London

Banks can help tame high inflation by passing higher interest rates through to depositors at the same time as they tighten credit conditions, ECB president Christine Lagarde said in a speech Thursday. She called on lenders - who have seen profits boosted by sharp rate rises - to support monetary policy “in good times and in bad.”

Hikes will continue until the ECB is “sufficiently confident that inflation is on track to return to our target in a timely manner,” she added. “At the same time, we need to carefully assess the strength of monetary policy transmission to financing conditions, the economy and inflation,”

There is still “considerable” tightening still in the pipeline, Lagarde said. But uncertainty also remains about how tighter financing conditions will affect the economy, and whether the effects will be stronger or weaker than in the past.
MNI Frankfurt Bureau | +49-69-720-146 |
MNI Frankfurt Bureau | +49-69-720-146 |

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