ECB ready to help banks, even as it hopes for calm after Swiss deal By Reuters

© Reuters. FILE PHOTO: President of the European Central Bank (ECB) Christine Lagarde speaks during a news conference after the ECB’s monetary policy meeting in Frankfurt, Germany March 16, 2023. REUTERS/Heiko Becker

FRANKFURT (Reuters) – The European Central Bank remains ready to support euro zone banks with loans if needed, ECB President Christine Lagarde said on Sunday, adding that the Swiss broker rescue of Credit Suisse was “instrumental” in restore calm to the markets.

Investors have been worried about the impact of Credit Suisse’s debacle on eurozone banks, despite the ECB’s repeated assurances that lenders in the 20 countries that share the euro are sound.

Lagarde reiterated that eurozone banks were “resilient with strong capital and liquidity positions”, but said the central bank was ready to step in if necessary.

“Our policy toolkit is fully equipped to provide liquidity support to the euro area financial system if needed and to maintain the smooth transmission of monetary policy,” she said in a statement.

The ECB has previously given banks ultra-cheap, multi-year loans known as targeted longer-term refinancing operations, as well as emergency liquidity assistance, which can be provided by the 20 national central banks of the eurozone against a wider palette of collateral.

Lagarde welcomed the “quick action and decisions taken by the Swiss authorities” that orchestrated Credit Suisse’s takeover of rival UBS.

“They are instrumental in restoring orderly market conditions and ensuring financial stability,” she said.

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