Just when it was planning to announce the end of its asset purchase program, events in Ukraine prompted one ECB policymaker to call for it to continue.
The European Central Bank is widely expected to announce the end of the asset purchase program (APP) at its meeting on March 10, but one of the bank's policymakers is urging caution, according to a report from «Reuters» (access restricted).
Governing Council Member and Bank of Greece Governor Yannis Stournaras told Reuters the current situation in Ukraine leaves the economic outlook «much more uncertain» and the ECB should err on the side of caution.
The Godfather
And just when the ECB was planning to exit the APP, Stournaras told Reuters that «judging the situation from today's point of view, I would rather favor a continuation of the APP at least until the end of the year, beyond September, rather than bringing the end closer.»
It is a situation reminiscent of Michael Corleone in The Godfather Part II where he said «just when I thought I was out, they pull me back in.»
«I wouldn't be in favor of announcing the end of APP in March,» Stournaras, not Corleone, added.
Stournaras also supported changing the ECB's policy message on interest rates to rule out a rate cut but without opening the door to an increase.
SNB Implication
The Swiss National Bank (SNB) often takes its cue from the European Central Bank. This was underscored by UBS CEO Ralph Hamers in an interview a few weeks ago with the «Aargauer Zeitung,» where he said that he only expected rates to rise in Switzerland once interest rates were lifted in the euro area.
The SNB will release its next monetary policy assessment on March 24.
