ING CEO Blasts ECB for Signaling Plan to Cut Rates, Restart QE
(Bloomberg) -- If the European Central Bank decides to cut interest rates and restart bond purchases, it would hurt the euro-area economy more than help it, according to ING Groep's chief executive officer.
Ralph Hamers said on a call with journalists Thursday that it's “not the moment” for such support measures. Lending demand in the region, he argued, is already sufficiently met, and pessimistic tones from the central bank could reinforce consumers' waning confidence.
“A further increase of the program or a decrease of rates into even further negative territory is hurting consumer confidence in the future,” he said. “We see that already. We are decreasing the rate, in some countries even to negative, but savings keep coming in. Why is that? Because they are uncertain about their financial future.”
The CEO argued that the region's protracted manufacturing-led slowdown has been driven by global uncertainties as the U.S. and China spar over trade policies and plans for the U.K.'s exit from the European Union remain unclear. The ECB announced last week that it would study possible measures in the coming weeks, with most analysts penciling in a rate cut and a renewed round of quantitative easing for September.
“The issue we have in Europe is the absence of confidence on the production side as a result of geopolitical tensions, as well as the trade tensions,” Hamers said. “I don't think that QE is a recipe to support an uncertain environment.”
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To contact the reporters on this story: Carolynn Look in Frankfurt at clook4@bloomberg.net;Ruben Munsterman in Amsterdam at rmunsterman1@bloomberg.net
To contact the editors responsible for this story: Paul Gordon at pgordon6@bloomberg.net, Brian Swint
©2019 Bloomberg L.P.
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