European Central Bank (ECB) Vice President Luis de Guindos is speaking at the CIRSF (Research Centre on Regulation and Supervision of the Financial Sector) Annual International Conference 2022 on Thursday. His speech is titled “The future of the EU financial system in a new geo-economic context.”
He said, “the euro area is now facing a challenging outlook.”
Very high inflation is dampening spending and production.
Period of heightened uncertainty 'here to stay'.
Price pressures have continued to strengthen and broaden.
Monetary policy needs to walk a fine line to get it right.
Depreciation of the euro also adds to these inflationary pressures.
We need to guard against second-round effects.
Inflation is projected to be unacceptably high this year and next.
Growth to slow 'substantially'.
We also have decided to continue applying flexibility in reinvesting redemptions coming due in PEPP.
Monetary policy is still accommodative.
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