ECB: Pressure for action – Deutsche Bank
Economists at Deutsche Bank have adjusted their expectations for the ECB meeting on 12 March amid mounting pressure following market sell-off.
“We continue to expect a new targeted liquidity facility. This could, for example, take the form of a six month LTRO aimed at backstopping SME lending in affected regions, perhaps complemented by easy collateral rules and flexibilities in now NPLs are recorded.”
“We expect a 10bp deposit rate cut to -0.60%. Although we question the wisdom from the perspective of the banking system stability the ECB has persistently argued that the reversal rate has not been reached.”
“We expect the ECB to do something to supplement general liquidity.”