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MNI BRIEF: CS A Governance Risk, Liquidity To Boost Confidence

(MNI) LONDON

The Credit Suisse 'crisis' was caused by a “governance problem” with no direct implications for the Eurozone banking system other than a contagion risk triggered by a lack of confidence in the financial system, and that is why leading central banks announced the enhanced liquidity measures over the weekend, Bank of Italy Governor Ignazio Visco said in an event in Milan Monday.

Visco said the move to enhance liquidity operations was aimed at restoring confidence across the financial sector. Credit will soon become harder to get and the macroeconomic fallout will require even more prudence, he warned.

“The direction is clear[…] the speed and size of movements will be decided meeting by meeting at the light of available information in the following months,” he said, noting that market expectations still see inflation close to 2% in the medium term.

MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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MNI London Bureau | +44 203-865-3812 | les.commons@marketnews.com
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