Speech given by Central Bank Governor Prof. Josef Bonnici at the annual ifs dinner
Malta Independent 05/12/2013: As you will all be aware, many of the member states of the euro area
are going through fundamental reforms that would over time promote
sustainable growth. This can occur only with the support of a healthy
financial sector, including a banking system that provides the needed
volume of credit at interest rates that reflect the European Central
Bank’s provision of ample and low-cost liquidity.
Over the course of the crisis the ECB has launched various measures to
avert the risk of more severe ramifications of the financial crisis. In
July, the ECB introduced forward guidance, assuring the financial
markets that its policy stance will remain accommodative and interest
rates low for as long as necessary. As a matter of fact, the recent cut
was consistent with this forward guidance.
Throughout the crisis, the ECB has played an important role in
ensuring, within its price stability mandate, the proper financing of
the euro area economy in a context of subdued credit dynamics. A series
of measures were introduced to ensure that banks can pass on low policy
rates to the real economy, in particular where they are needed the most.
These measures include providing ample liquidity to euro area banks,