7/4, 5:37 PM (Source: TeleTrader)
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ECB will react to prevent fragmentation - VP

European Central Bank (ECB) Vice President Luis de Guindos said on Monday that the bank "will react to prevent fragmentation" that could come as a consequence of the upcoming change of its monetary policy.

An "excessive divergence" in bond yields across the Eurozone countries could lead to financial instability, and the ECB will strive to ensure a "smooth and even transmission" of monetary policy to stabilize prices, de Guindos noted at the Frankfurt Euro Finance Summit.

Prices will stay high "for some time" and inflation risks "are on the upside," but the bank expects inflation to land at its 2% goal "over the medium term," he pointed out. "The downside scenario in our June projections... implies a contraction of activity in 2023, following weaker but positive growth in 2022," the policymaker warned.

Baha Breaking News (BBN) / MS