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Paramo Says ECB Isn’t Discussing Exit Strategy ‘in Detail’

March 23, 2012

European Central Bank Executive Board member Jose Manuel Gonzalez-Paramo said officials are not yet discussing the details of unwinding the central bank’s crisis measures.

“Discussing in detail, no, because we’re still examining the effects of the two auctions,” Gonzalez-Paramo told reporters in Malaga, Spain, today.

The ECB has loosened its collateral criteria and loaned banks more than 1 trillion euros ($1.3 trillion) for three years to prevent a credit crunch. Gonzalez-Paramo said the measures had contributed to improving the financial and economic environment since the start of the year.

There has been a “turning point” in the euro-area crisis, even as it “remains to be seen if this turns into a decisive change,” he said.

While banks haven’t stepped up lending as a result of the extraordinary loans, data suggests they may do so in the coming months, he said.

“The credit cycle hasn’t changed drastically,” he said. “But banks are contemplating much more positively their disposition to offer credit and relax credit standards in the coming months so we’ll have to see if that materializes.”

The euro-area economy is in a “stabilization moment,” he said, and the Frankfurt-based ECB is “confident that in the coming quarters” there will be a recovery.

While rising oil prices are “one of the upside risks” to price stability, “inflation expectations for the medium term remain anchored” in line with the ECB’s definition of price stability.

To contact the reporter on this story: Emma Ross-Thomas in Madrid at

To contact the editor responsible for this story: Gabi Thesing at

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