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☆ Europe's problems are far bigger than a shallow recession
▼ + stars: | 2023-11-14 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

Deep structural problems mean Europe is bound to trail most other big economic areas for years to come. The labour market remains tight and the world economy is rebounding, so external demand is also likely to be healthier. Fearing it will be difficult to hire in future, firms are now hanging onto workers, creating even more labour market tightness, potentially fuelling wage growth and weakening productivity. The potential growth rate for Europe's largest economy is now below 1%. European Union governments are meanwhile struggling to reach consensus on bigger questions that will help shape the future.

Persons: Philip Lane, Erik Nielsen, Eric Gaillard, Europe's, There's, Lane, Reinhard Cluse, Mark John, Catherine Evans Organizations: Central Bank's, REUTERS, European Commission, UBS, European Union, Thomson Locations: FRANKFURT, Europe, Nice, France, United States, Germany

☆ Euro zone should not ease bank buffers, ECB says
▼ + stars: | 2023-11-13 | by ( ) www.reuters.com time to read: +2 min

European Central Bank (ECB) Vice-President Luis de Guindos arrives at the Presidential Palace for a meeting with Cyprus President Nikos Christodoulides in Nicosia, Cyprus, October 4, 2023. REUTERS/Yiannis Kourtoglou/File Photo Acquire Licensing RightsFRANKFURT, Nov 13 (Reuters) - Euro zone economic growth will remain weak in the near term as services and the labour market weaken but nations in the bloc should not free discretionary bank buffers to ease the pain, European Central Bank Vice President Luis de Guindos said. A potential concern is that the euro zone economy has been broadly stagnating all year and any recovery next year will be shallow, keeping growth below 1%. "It is likely that the euro area economy will remain subdued in the near term." On the prospects for interest rates, de Guindos said the ECB would have more information in December "to reassess the inflation outlook and required policy action".

Persons: Luis de Guindos, Nikos Christodoulides, Yiannis, de Guindos, Guindos, Balazs Koranyi, Francesco Canepa, Emelia Sithole Organizations: European Central Bank, Cyprus, REUTERS, Rights, ECB, Thomson Locations: Nicosia, Cyprus, Germany, France, Netherlands

☆ Centeno says outgoing Portugal PM only invited him to ponder on premiership
▼ + stars: | 2023-11-13 | by ( Sergio Goncalves | ) www.reuters.com time to read: +2 min

LISBON, Nov 13 (Reuters) - Bank of Portugal Governor Mario Centeno, who is under fire from the opposition over an invitation by the outgoing prime minister to replace him as premier, said on Monday he never accepted the offer but was just asked to ponder on the matter. Portuguese opposition parties on Friday argued that such an invitation compromised the political independence of a central bank governor. The Bank of Portugal's ethics committee is expected to meet on Monday to evaluate his conduct. Prime Minister Antonio Costa stepped down on Tuesday over an investigation into alleged illegalities in his government's handling of lithium and hydrogen projects and a large-scale data centre. Centeno announced his departure from the finance ministry in June 2020, during Costa's second term, and was nominated to head the bank a month later.

Persons: Mario Centeno, Antonio Costa, illegalities, Costa, Marcelo Rebelo de Sousa, Centeno, Rebelo de Sousa, Olli Rehn, Balazs Koranyi, Francesco Canepa, Andrei Khalip, Bernadette Baum Organizations: Bank of Portugal, Socialist, European Central Bank policymaker, Bank of, ECB, Thomson Locations: LISBON, Portuguese, Bank of Portugal, ECB's, Finland, Frankfurt

☆ Euro zone inflation could tick up in coming months: Lagarde
▼ + stars: | 2023-11-10 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, Nov 10 (Reuters) - Euro zone inflation could tick up in the coming months but European Central Bank interest rates held at their current level at least for several quarters could still get price growth back to 2%, ECB President Christine Lagarde said on Friday. "There will be a resurgence of probably higher numbers going forwards and we should be expecting that," Lagarde told a Financial Times event. Still, Lagarde hinted that even if inflation picks up, another rate hike may not be needed. When asked what long enough means, Lagarde said no change should be expected in the "next couple of quarters". Reporting by Balazs Koranyi; editing by Christina Fincher, Tomasz Janowski and David EvansOur Standards: The Thomson Reuters Trust Principles.

Persons: Christine Lagarde, Lagarde, Francois Villeroy de Galhau, Philip Lane, Balazs Koranyi, Christina Fincher, Tomasz Janowski, David Evans Organizations: Central Bank, ECB, Financial, European Union, Thomson Locations: FRANKFURT, French

☆ ECB must keep rates at or near 4% through 2024 to get inflation down -IMF
▼ + stars: | 2023-11-08 | by ( ) www.reuters.com time to read: +3 min

"Monetary policy is appropriately tight and needs to remain so in 2024," Kammer told a news conference. "For all intents and purposes, (the deposit rate) should be held at that level or close to that level throughout 2024." Kammer warned the ECB against cutting rates too soon because that would require even more costly policy tightening later on. While the IMF sees price growth back at target in 2025, an exceptionally tight labour market could push this date back to 2026, it warned. Real wages also have some way to go catch up with inflation and this could also keep up the price pressure, the IMF said.

Persons: Ralph Orlowski, Alfred Kammer, Kammer, Balazs Koranyi, Mark Potter Organizations: European Union, European Central Bank, REUTERS, Rights, International Monetary Fund, ECB, IMF's European Department, IMF, Thomson Locations: Frankfurt, Germany, Gaza

☆ Multinationals plan moves to minimise China risk, ECB survey shows
▼ + stars: | 2023-11-06 | by ( ) www.reuters.com time to read: +2 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. Seeking on-the-ground confirmation, the ECB surveyed 65 very large firms with a global footprint and 49% said they were looking to "near-shore", or bring production closer to the point of sales. "As to those countries which posed – or could pose – a risk to supply chains in their sector more generally, two-thirds of all respondents cited China," the ECB said in an Economic Bulletin article. "A large majority of these identified China as that country, or one of those countries, with all of them considering this an elevated risk," the ECB added. The moves could also fuel inflation as close to half of firms said they expected the changes to result in higher prices, the paper added.

Persons: Heiko Becker, Balazs Koranyi, Andrew Heavens Organizations: European Central Bank, REUTERS, Rights, ECB, European, Thomson Locations: Frankfurt, Germany, China, Ukraine

European flags are seen in front of the European Central Bank (ECB) building, in Frankfurt, Germany, July 21, 2022. Price pressures are easing and the economy is slowing to a point that a recession may already be underway, making any further rate hikes increasingly unlikely. Meeting in Athens for the first time in over a decade, the Governing Council is expected to have an easy time deciding on rates. Others argue that growth prospects are deteriorating so quickly that the ECB would be better served with a "neutral" guidance, emphasizing data dependency. This suggests that any change in the scheme will be gradual, so the ECB can protect Italy as long as possible.

Persons: Wolfgang Rattay, Martin Wolburg, Wolburg, Frederik Ducrozet, reinvestments, Balazs Koranyi, Emelia Sithole Organizations: European Central Bank, REUTERS, ECB, Generali Investments, Wealth Management, Thomson Locations: Frankfurt, Germany, FRANKFURT, Athens, Italy

☆ Weak euro zone lending adds to recession fears
▼ + stars: | 2023-10-25 | by ( ) www.reuters.com time to read: +2 min

A view shows the logo of the European Central Bank (ECB) outside its headquarters in Frankfurt, Germany March 16, 2023. REUTERS/Heiko Becker/File Photo Acquire Licensing RightsFRANKFURT, Oct 25 (Reuters) - Bank lending across the euro zone came to a near standstill last month, European Central Bank data showed on Wednesday, providing further evidence that the 20-nation bloc was skirting a recession. Still, detailed data suggest that underlying trends may be more nuanced as the monthly flow of fresh loans was a positive 14.0 billion euros, reversing much of the previous month's negative 19.9 billion euro reading. Lending is taking a hit after a string of interest rate hikes took the ECB's key rate to a record high 4% last month, all in the hope this would depress activity enough for inflation to return to 2%. Lending to households meanwhile rose by just 0.8% after a 1.0% increase in August with the monthly flow of loans at a positive 4.5 billion euros, ECB data showed.

Persons: Heiko Becker, Balazs Koranyi, Francesco Canepa Organizations: European Central Bank, REUTERS, Rights, Bank, PMI, Thomson Locations: Frankfurt, Germany

☆ Analysis: Middle East throws central banks yet more unknowns
▼ + stars: | 2023-10-20 | by ( Mark John | ) www.reuters.com time to read: +5 min

Now, to complicate matters for a professional caste which prides itself on being data-driven, the Middle East is throwing a new set of real but unquantifiable risks into their equations. Unless the picture changes dramatically in coming days, the European Central Bank, U.S. Federal Reserve, Bank of England and Bank of Japan are already expected to keep their policy rates on hold in meetings over the next two weeks. ECB rate-setter Yannis Stournaras, the governor of the Greek central bank, argued that Europe had broadly managed to absorb the effects of rising energy costs triggered by the Ukraine war and hoped it could do the same if further shocks emerged. For now, the conflict remains largely confined to Israel and Gaza, something S&P Global Market Intelligence said in a study this week was already "muddying the waters" for central banks. As the Fed's Powell put it: "Our institutional role at the Federal Reserve is to monitor these developments for their economic implications, which remain highly uncertain".

Persons: Jerome Powell, David Westin, Brendan McDermid, Powell, Huw Pill, Yannis Stournaras, Tetsuya Hiroshima, Fed's Powell, Dan Burns, Balazs Koranyi, Francesco Canepa, Maria Martinez, Leika, Kevin Yao, David Milliken, Tomasz Janowski Organizations: Federal, Anchor, Bloomberg, Street, Economic, of New, REUTERS, Bank of England, International Monetary Fund, European Central Bank, U.S, Federal Reserve, Bank of Japan, Fed, ECB, Reuters Graphics, Reuters, Tokai, Toyota Motor Corp, P Global Market Intelligence, Thomson Locations: of New York, New York City, U.S, Israel, Ukraine, Iran, Hormuz, Europe, United States, Japan, Gaza, Washington, Frankfurt, Berlin, Tokyo, Beijing, London

☆ U.S. says it is 'concerned' about Hungary's relationship with Russia
▼ + stars: | 2023-10-20 | by ( Boldizsar Gyori | ) www.reuters.com time to read: +2 min

Sputnik/Grigory Sysoyev/Pool via REUTERS Acquire Licensing RightsBUDAPEST, Oct 20 (Reuters) - The United States is concerned about Hungary's relationship with Russia, and finds Prime Minister Viktor Orban's decision to meet with Russian President Vladimir Putin "troubling", the U.S. Embassy in Budapest said on Friday. He is the only EU leader to attend the forum or to maintain close ties with Putin since Russia invaded Ukraine on Feb. 24, 2022. "The United States is concerned about Hungary’s relationship with Russia," U.S. Orban told Putin during their meeting in Beijing that Hungary never wanted to oppose Russia and was trying to salvage bilateral contacts. Relations between Budapest and Washington have soured in the past year because of Hungary's foot-dragging over the ratification of Sweden's NATO accession.

Persons: Vladimir Putin, Viktor Orban, Grigory Sysoyev, Viktor Orban's, Orban, Putin, Hungary David Pressman, Pressman, Balazs Orban, Boldizsar Gyori, Alan Charlish, Gareth Jones Organizations: Hungarian, Forum, Sputnik, REUTERS Acquire, Rights, U.S, Embassy, Putin, NATO, Radio Free, Thomson Locations: Beijing, China, United States, Russia, Budapest, Ukraine, Hungary, Sweden, Moscow, Washington, NATO

☆ Key takeaways from the IMF/World Bank meetings
▼ + stars: | 2023-10-14 | by ( ) www.reuters.com time to read: +5 min

Global inflation is seen dropping from 6.9% this year to a still-high 5.8% next. Italian central bank governor Ignazio Visco said there was an impression markets were "reevaluating the term premium" as investors become more nervous about holding longer term debt. One debt restructuring deal emerged: Zambia finally agreed a debt rework memorandum of understanding with creditors including China and France. Sri Lanka said on Thursday it reached an agreement with the Export-Import Bank of China covering about $4.2 billion of debt, while talks with other official creditors are stalling. There was much talk ahead of Marrakech on revamping the IMF and World Bank to better reflect the emergence of economies like China and Brazil.

Persons: Ajay Banga, Mercy Tembon, Finance Serhiy Marchenko, Ceda Ogada, Kristalina Georgieva, Pierre, Olivier Gourinchas, Ignazio Visco, Joyce Chang, Vitor Gaspar, Mehmet Simsek, Murat Ulgen, Kate Donald, Ahmed El Jechtimi, Andrea Shalal, David Lawder, Leika Kihara, Elisa Martinuzzi, Rachel Savage, Jorgelina, Rosario, Balazs Koranyi, Mark John, Christina Fincher Organizations: Bank, Finance, International Monetary Fund, Emerging, Research, HSBC, Reuters, Export, Import Bank of, World Bank, Oxfam International's Washington DC Office, Thomson Locations: Ukraine, MARRAKECH, Morocco, Moroccan, Marrakech, Israel, Central, United States, China, Italy, Italian, Turkey, Kenya, Zambia, France, Sri Lanka, Import Bank of China, Brazil, U.S

☆ BoE's Bailey says he's puzzled by stubborn pay growth in UK
▼ + stars: | 2023-10-14 | by ( ) www.reuters.com time to read: +1 min

People walk outside the Bank of England in the City of London financial district in London, Britain May 11, 2023. REUTERS/Henry Nicholls/File photo Acquire Licensing RightsMARRAKECH, Morocco, Oct 14 (Reuters) - Bank of England Governor Andrew Bailey said on Saturday he was puzzled by the continued strength of pay growth in Britain which, unlike other areas of the economy, has not yet responded to the BoE's run of 14 back-to-back interest rate hikes. The increases in borrowing costs were having an impact on employment numbers and in the housing market, Bailey told a panel discussion on the sidelines of International Monetary Fund meetings in Morocco. "I should say what is more puzzling and in a sense we wait to see is the situation on pay and earnings where... the usual transmission mechanism is not yet being demonstrated," he said during the event organised by the Group of 30 consultative body. Reporting by Balazs Koranyi Writing by William SchombergOur Standards: The Thomson Reuters Trust Principles.

Persons: Henry Nicholls, Andrew Bailey, Bailey, Balazs Koranyi, William Schomberg Organizations: Bank of England, REUTERS, Rights, International Monetary Fund, Group, Thomson Locations: City, London, Britain, Rights MARRAKECH, Morocco

☆ Euro zone labour market shows no sign of weakening: Lagarde
▼ + stars: | 2023-10-14 | by ( ) www.reuters.com time to read: 1 min

MARRAKECH, Oct 14 (Reuters) - The euro zone labour market shows no sign of softening, despite a near recessionary environment and a record string of interest rate hikes, European Central Bank (ECB) President Christine Lagarde said on Saturday. "The labor market still shows no real sign of weakening," Lagarde told a conference. "The numbers we see both in terms of actual participation in the unemployment and unemployment in nominal numbers are quite striking." The ECB has been raising rates to dampen demand and persistently low unemployment is a key reason why some policymakers worry that high inflation could get stuck above target as workers enjoy the some of the best wage growth in years. Reporting by Balazs Koranyi Editing by Mark PotterOur Standards: The Thomson Reuters Trust Principles.

Persons: Christine Lagarde, Lagarde, Balazs Koranyi, Mark Potter Organizations: Central Bank, ECB, Thomson Locations: MARRAKECH

☆ ECB policymakers eye springtime push to cut payments on banks' deposits, sources say
▼ + stars: | 2023-10-13 | by ( Balazs Koranyi | ) www.reuters.com time to read: +5 min

MARRAKECH, Oct 13 (Reuters) - European Central Bank policymakers are planning a springtime push to cut interest payments made to commercial banks, in part to recoup some of the costs associated with a decade worth of stimulus, sources familiar with discussions said. That would mean overall interest payments to lenders - which still earn the ECB deposit rate, currently 4%, on other excess cash parked with the central bank - would be reduced further. But the ECB rejected the proposal in July, partly on resistance from its Executive Board, the sources said. The board's key argument is that excess liquidity is distributed unevenly across the euro zone and raising the ratio would put an excessive burden on smaller banks with a larger portion of deposits. Deutsche Bank CEO Christian Sewing argued that the change would add to banks' financial burdens and restrict their lending options.

Persons: Bundesbank, Joachim Nagel, Robert Holzmann, Latvia's Martin Kazaks, Isabel Schnabel, Austria's Holzmann, France's Francois Villeroy de, Pierre Wunsch, We're, Schnabel, Deutsche Bank CEO Christian Sewing, Tom Sims, John Stonestreet Organizations: Central Bank, ECB, Austrian, Barclays, Deutsche Bank CEO Christian, Thomson Locations: MARRAKECH

☆ BoE's Bailey says future rate decisions will be 'tight'
▼ + stars: | 2023-10-13 | by ( ) www.reuters.com time to read: +2 min

Governor of the Bank of England Andrew Bailey attends a press conference for the Monetary Policy Report August 2023, at the Bank of England in London, Britain, August 3, 2023. Bailey echoed recent comments from other BoE officials who have stressed they are keeping their options open for future rate decisions after the Monetary Policy Committee voted 5-4 to halt its run of back-to-back rate hikes in September. Only a quarter of economists polled by Reuters late last month thought the MPC would vote to raise Bank Rate again on Nov. 2. "The last mile really does lean heavily on... restrictive policy," Bailey said, adding the economic outlook appeared "very subdued". Britain's potential growth rate - the pace at which the economy can grow without generating excess inflation - was "substantially less" than in the past, something that would continue to weigh on monetary policy, Bailey said.

Persons: Bank of England Andrew Bailey, Alastair Grant, Andrew Bailey, Bailey, BoE, Huw Pill, Ben Broadbent, Balazs Koranyi, Andy Bruce, William Schomberg Organizations: Bank of England, Monetary, Rights, Reuters, Institute of International Finance, International Monetary Fund, Thomson Locations: London, Britain, Rights MARRAKECH, Morocco, Marrakech

☆ Split ECB chose rate hike to show grit against inflation - accounts
▼ + stars: | 2023-10-12 | by ( ) www.reuters.com time to read: +2 min

FRANKFURT, Oct 12 (Reuters) - Divided European Central Bank policymakers opted for raising interest rates at their latest meeting to show resolve in the fight against inflation even though evidence was inconclusive, the account of the gathering showed on Thursday. The ECB raised its key interest rate to a record high of 4.0% at the Sept 13-14 meeting but signalled that its 10th hike in a 14-month-long effort to bring down inflation was likely to be the last as the economy slowed. The ECB's account of the meeting showed the decision was a "close call" given "considerable uncertainty", with some indicators suggesting a 3.75% deposit rate might have also done the job. But in the end the proposal to raise interest rates by 25 basis point was supported by "a solid majority" of the 26 members of the Governing Council. Borrowing costs have eased slightly this week on the back of Federal Reserve officials talking down the need for further interest rate increases and nervousness about the Israel-Hamas conflict spreading more widely in the Middle East.

Persons: Francesco Canepa, Balazs Koranyi Organizations: Central Bank, ECB, Governing, Federal Reserve, Thomson Locations: FRANKFURT, Italy, Israel

Because higher yields signal a rise in borrowing costs, the selloff has raised questions about the long-term sustainability of Italy's huge debt pile. Meloni has said she is not worried by the rise in yields, saying: "Italy is solid." Most of the sources said there is no hurry to end reinvestments or even to formally open this discussion on the policy-making Governing Council. Some argued that PEPP reinvestments should end before any talk of a rate cut, now expected by markets around mid-2024. Spreads of Italian 10-year bonds over their German counterparts are up roughly 30 basis points this month in their biggest jump since last December.

Persons: Wolfgang Rattay, Giorgia, Christine Lagarde, Meloni, PEPP, Balazs Koranyi, Catherine Evans Organizations: European Central Bank, ECB, REUTERS, Rights, Central Bank, Thomson Locations: Frankfurt, Germany, Italy

☆ ECB looks to AI to better understand inflation after big misses
▼ + stars: | 2023-09-28 | by ( ) www.reuters.com time to read: +2 min

AI (Artificial Intelligence) letters are placed on computer motherboard in this illustration taken, June 23, 2023. Joining the masses of firms already using AI, the ECB is now exploring ways to process and analyse millions of data points, including public price data, corporate statistics, news articles and bank supervisory documents to produce better analysis for policy decisions. Among several AI initiatives, the bank wants to deepen its understanding of price-setting behaviour and inflation dynamics, the blog said. Using web scraping, the ECB can collect masses of real-time price data but the figures are unstructured and unsuitable for calculating inflation. So the ECB wants to harness AI to structure data and improve its analysis, it said.

Persons: Dado Ruvic, Balazs Koranyi, Ros Russell Organizations: REUTERS, Rights, European Central Bank, ECB, Thomson

Retail fuel prices in the U.S. and Europe have risen to multi-month highs as crude prices have rallied. "If energy prices increase and stay high, that'll have an effect on spending, and it may have an effect on consumer expectations for inflation, things like that. High interest rates are already curbing demand across Western economies, including for oil. The U.S. Federal Reserve on Wednesday pressed pause on interest rates, but did not rule out one more hike this year. President Joe Biden has already promised to cut prices, though has not said how, and in the short term the impact of autumn refinery maintenance on supplies could keep prices high.

Persons: Mike Segar, Brent, Jerome Powell, Morgan Stanley, Goldman Sachs, Goldman, PVM's Tamas Varga, I'm, Craig Erlam, Ajay Parmar, Joe Biden, Gordon Balmer, Natalie Grover, Robert Harvey, Mark John, Balazs Koranyi, Dan Burns, Simon Webb, Barbara Lewis Organizations: Exxon, REUTERS, . West Texas Intermediate, Reuters, Retail, Federal, International Energy Agency, Organization of, Petroleum, U.S . Federal Reserve, HSBC, Energy Information Administration, U.S, Diesel, Energy, Petrol Retailers, Thomson Locations: Edgewater , New Jersey, U.S, OPEC, Europe, Brazil, Guyana, United States, Russia, Saudi Arabia, Ukraine, Britain, France, London, Frankfurt, New York

☆ Global central banks unite in "higher for longer" credo
▼ + stars: | 2023-09-21 | by ( Mark John | ) www.reuters.com time to read: +6 min

The so-called "higher for longer" mantra is now the official stance of the U.S. Federal Reserve, European Central Bank and the Bank of England, as well as being echoed by monetary policy-makers from Oslo to Tapei. U.S. Federal Reserve policymakers had a similar message on Wednesday. Turkey's central bank confirmed its hawkish turn while in Asia, Taiwan's central bank flagged continued tight policy. Reuters Graphics"TIPPING POINT"Belgian central bank chief and ECB board member Pierre Wunsch - an early voice urging tougher central bank action to counter inflation from end-2021 - said on Thursday that monetary policy was now at the right level. That said, the prospect that global interest rates are pretty close to peak will be of huge relief to emerging economies suffering from heavy debt servicing loads.

Persons: Jerome Powell, Christine Lagarde, Kazuo Ueda, Ann, BoE, Andrew Bailey, Pierre Wunsch, Wunsch, COVID lockdowns, Jerome, Powell, Krishna Guha, Howard Schneider, Balazs Koranyi, Catherine Evans Organizations: European Central Bank, Bank of Japan, Kansas City Federal, REUTERS, U.S . Federal Reserve, Bank of England, U.S . Federal, Swiss National Bank, South African Reserve Bank, People's Bank of, Reuters, ECB, Reuters Global Markets, Economics, Sterling, Swiss, United, Thomson Locations: Jackson Hole , Wyoming, U.S, Central, Oslo, Tapei, Europe, Norway, Sweden, Asia, People's Bank of China, Belgian, United States, Ukraine, Washington, Frankfurt, London, Stockholm, Zurich, Ankara

☆ No strong case for jacking up bank charges: ECB's Wunsch
▼ + stars: | 2023-09-21 | by ( ) www.reuters.com time to read: +2 min

Sept 21 (Reuters) - There are no strong arguments for the European Central Bank to increase mandatory reserves for banks, Belgian central bank chief Pierre Wunsch said on Thursday, weighing in on a key debate about a potential move to tighten policy further. The ECB cut to zero the rate it pays to banks on mandatory reserves earlier this year. Some policymakers are now pushing for an increase in the reserve requirement, in part to reduce losses associated with the multi-trillion-euro pool of excess liquidity sloshing around banks. "I don't see any strong argument for using movements in the reserve requirements when we still have this huge portfolio (of bonds) that we can reduce," Wunsch told the Reuters Global Markets Forum. But Wunsch said that reducing central bank losses should not be the objective of monetary policy and changing the rules now could make commercial banks wary of taking part in future stimulus schemes.

Persons: Pierre Wunsch, Wunsch, Banks, Divya Chowdhury, Balazs Koranyi, Jane Merriman, Chizu Organizations: European Central Bank, ECB, Reuters Global Markets, Thomson Locations: Belgian, Mumbai

The new German central bank (Bundesbank) vice-president Claudia Buch poses during a photocall at the Bundesbank headquarters in Frankfurt, May 20, 2014. Buch, who has been the vice-president of Germany's central bank for 10 years after a career in academia, was chosen last week over Spain's Margarita Delgado, the European Parliament's preferred candidate. The EU Parliament will have a final say on the appointment on Wednesday at a vote scheduled for 1400 GMT. At the hearing, Buch said she would immediately resign from her role as an alternate if appointed as chief supervisor. ECB President Christine Lagarde said last week that the 26-member Governing Council followed the rules in Buch's selection.

Persons: Claudia Buch, Ralph Orlowski, Buch, Spain's Margarita Delgado, Joachim Nagel, Christine Lagarde, Marco Zanni, Frank Siebelt, Hugh Lawson, Alexandra Hudson Organizations: REUTERS, Central, Single, EU, ECB, Reuters, Council, Democracy Group, Alexandra Hudson Our, Thomson Locations: Frankfurt, FRANKFURT, Spain

☆ EU executive says aid payments for Somalia 'temporarily suspended'
▼ + stars: | 2023-09-19 | by ( Gabriela Baczynska | ) www.reuters.com time to read: +3 min

REUTERS/Ayenat Mersie//File Photo Acquire Licensing RightsUNITED NATIONS, Sept 19 (Reuters) - The European Union's executive said on Tuesday that disbursements of humanitarian aid in Somalia were "temporarily suspended" after a U.N. probe found widespread theft and misuse of support meant to avert famine. Quoting senior EU officials, Reuters reported exclusively on Monday that the European Commission had temporarily suspended funding for the World Food Programme (WFP) in Somalia because of the U.N. findings. Donors boosted funding to Somalia last year as humanitarian officials warned of a looming famine due to the Horn of Africa's worst drought in decades. The U.N. humanitarian aid budget for Somalia is envisaged at 72 million euros ($77 million), of which 10 million euros ($10.68 million) are earmarked for the WFP. Three months ago the WFP and the U.S. Agency for International Development (USAID) suspended food aid to neighboring Ethiopia in response to a widespread diversion of donations.

Persons: Ayenat, Balazs Ujvari, Gabriela Baczynska, Howard Goller Organizations: REUTERS, UNITED NATIONS, European, Reuters, European Commission, Food Programme, WFP, U.S . Agency for International Development, USAID, Thomson Locations: Dollow, Somalia, Muri, Mogadishu, United States, Ethiopia

A view shows the placards of the political parties in front of the European Central Bank (ECB) building in Frankfurt, Germany, September 14, 2023. The central bank for the 20 countries that use the euro has already raised interest rates 10 times to record levels but inflation remains well above its 2% target. ECB President Christine Lagarde said last week that policymakers had not discussed the bond-buying schemes at their latest policy meeting. She described the PEPP as the ECB's "first line of defence" to preserve policy transmission - central bank jargon for bond market stability in the most indebted countries. Slovenian central bank governor Bostjan Vasle recently backed selling bonds bought under the ECB's older Asset Purchase Programme, which is less flexible than the PEPP.

Persons: Wolfgang Rattay, Christine Lagarde, Bostjan Vasle, Peter Kazimir, Catherine Evans Organizations: European Central Bank, REUTERS, Central Bank, Reuters, ECB, Thomson Locations: Frankfurt, Germany, Italy, FRANKFURT, Athens, Slovenian, PEPP, Sintra

The second senior EU official confirmed that. A third source, also an EU official, said the Commission was "cooperating actively with WFP to resolve systemic defects" but said no aid was suspended at this stage. Last year, it contributed more than half of the $2.2 billion of funding that went to the humanitarian response there. The U.N. report did not attempt to quantify the amount of aid that was diverted but said its findings "suggest that post-delivery aid diversion in Somalia is widespread and systemic". In all, investigators collected data from 55 IDP sites in Somalia and found aid diversion in all of them, the report said.

Persons: Ayenat, Balazs Ujvari, Antonio Guterres, Devex, Jessica Jennings, gatekeepers, Gabriela Baczynska, Michelle Nichols, Aaron Ross, Emma Farge, Daphne Psaledakis, Joe Bavier, Howard Goller Organizations: REUTERS, UNITED NATIONS, European Union, Food Programme, Reuters, European Commission, EU, WFP, U.N, U.S . Agency for International Development, USAID, European, Somali Disaster Management Office, United Nations, Thomson Locations: Dollow, Somalia, NAIROBI, GENEVA, Ethiopia, United States, Nairobi, Geneva

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