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7/4/2019, 12:00 PM (Source: TeleTrader)
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ECB's De Guindos: Risks are tilted to downside

Companies in the financial and non-financial sectors must prop up their balance sheets and the European Central Bank's macroprudential measures can be strengthened to restrain excessive risk taking, Vice President Luis de Guindos said on Thursday. Speaking on Thursday in Lisbon, he also pointed to the possibility of building additional cushions against shocks "in specific sectors or countries." The top policymaker warned of "renewed global headwinds" for the Eurozone from "trade protectionism, vulnerabilities in emerging markets and geopolitical factors, including those related to Brexit," and supported the ECB's stance that risks to economic expansion are tilted to the downside.

In the past decade, lenders have been firming their capital adequacy, with the key ratio rising by 3.9 percentage points to 14.3% from 2010 until the end of last year, De Guindos noted and attributed it to the "general recovery," especially in view of the monetary stimulus, and "increased market pressures." The unconventional, easing measures are still crucial for the return of inflation back up to target, which is determined as close to but below 2%, according to the rate-setter.

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