“The European rules of the BRRD directive contain everything the necessary flexibility for exceptional circumstances”, which occur, for example, when “the markets for the disposal of non-performing loans do not work and you want to avoid uncontrolled sales”, but the assessments on how to use this flexibility “are up to the European Commission”. The president of the ECB, Mario Draghi, in the press conference at the end of the Governing Council. The reference is to the situation of the banks and the possibility of supporting them through state aid as an exception to the bail-in rules, an issue of particular relevance for Italian institutions, primarily for Monte Paschi. After all, the problem of excess NPLs "is very important" and "certainly needs to be tackled" with adequate reforms, added Draghi.
"For Italian banks that of non-performing loans it is a serious problem - continued the president of the ECB - and it will take time to solve it, but we should be aware that the longer it lasts, the less efficient the banking system will be, and therefore less able to transmit the benefits of our monetary policy to the real economy, since NPLs weigh on profitability levels. In Italy, more can be done, for example develop a functioning Npl market, creating a regulatory framework that allows NPLs to be sold and traded easily”.
As for the climate of uncertainty following the vote in favor of Brexit, the board of the European Central Bank "will closely monitor economic and financial developments" in the Eurozone and, "if necessary to achieve its objectives", in the coming months "will act using all the tools at its disposal", assured the number one of the Eurotower. Still on Brexit, Draghi then recalled that “there has been talk of a 0,2-0,5% decrease in growth in the next three years. The Commission also gave a similar figure. I think, however - he added - that we should take all these estimates with great caution. Uncertainty is prevalent and the outcome ultimately will depend on how long it takes to complete negotiations with London."
In particular, the central bank will verify the effective transfer to the real economy of the monetary measures implemented so far. On the financial side, however, Draghi noted that the European financial markets they showed a "encouraging hold” to the spikes in volatility following the British referendum, also thanks to the announced willingness on the part of the central banks to continue to supply liquidity to the system.
As for the future of monetary policy, the ECB expects to maintain the cost of money at current levels, if not lower, "for an extended period of time", even beyond the deadline established for quantitative easing (March 2017). Rates are therefore confirmed at their lowest levels ever: zero on the main refinancing operations, 0,25% on marginal refinancing and -0,40% on deposits held on behalf of commercial banks. In turn, the 80 billion euro per month bond purchase plan could be extended, “if necessary”.
As far as growth is concerned, the data coming from the economic situation, explained Draghi, "indicate a situation of growth also in the second quarter" after +0,6% in the first, "but at a slower pace” compared to the first part of the year.
