Interest rates latest publications
Leveraged loans are granted to entities with considerable amounts of debt, that is, according to the European Central Bank (ECB), those with a debt-to-income ratio before interest and tax of more than four.
The central bank came in line with what we were expecting announcing a strong package of further accommodative measures. It enhanced the forward guidance on rates, cut the depo rate by 10bps, announced a two-tier system for bank reserves and a new open-ended asset purchase program (APP) and sweetened TLTRO-III conditions.
Last Thursday, the ECB maintained interest rates, but has prepared the ground for changes in September in response to the fact that inflation and its expectations have been below target for a long time.
The ECB kept rates unchanged but reintroduced the easing bias on rates, requested studies on further measures and, importantly, started talking about a symmetric inflation aim.
The ECB strengthened its forward guidance on rates, with no rate hikes at least through the first half of 2020 in response to the increase and persistence of global uncertainty. The ECB opens the possibility to further easing if needed.
The emergence of cryptocurrencies is opening the way to Central Bank Digital Currencies (CBDCs). This paper highlights the pros and cons of issuing CBDCs under four different variants: from the more modest proposals to the most ambitious ones where there could be a serious disruption in financial intermediation.