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ECB's Stournaras says central bank's actions spurred Eurozone credit growth

FXStreet (Łódź) - Greece's central bank governor and ECB Governing Council member Yannis Stournaras said today in a speech in Slovenia that one of biggest woes for the Eurozone currently is weak bank lending which is being propped up by ECB's liquidity-boosting measures.

The ECB lawmaker remarked that "the establishment of the Banking Union is restoring confidence in the banking sector," which should improve further with the finalization of the bank stress tests. Moreover, the EU ABS market will receive a boost from ECB's ABS and the covered bond purchase programmes.

Finally, Stournaras stressed that "non-standard monetary policy measures and progress towards a banking union are of prime importance, in order to reduce market fragmentation and allow the normal transmission of monetary policy to the most vulnerable areas of the monetary union."

Ryan Littlestone speculates on ForexLive: "If banks are holding back ahead of the stress tests then we should see a flood of lending after. That said, does that mean that the banks still see a lot of lending as high risk so are holding back?"

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