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Account of the monetary policy meeting
Mr Cœuré reviewed the latest financial market developments. As regards bond market developments, the fall in euro area ten-year overnight index swap (OIS) yields from early October 2018 to mid-February 2019 had recently reversed slightly. Notwithstanding the recent recovery, yields remained compressed compared with the levels observed in early October 2018. Mr Cœuré recalled that the dominant driver of lower yields in recent months had been a fall in the inflation component, as reflected in revisions to market-based inflation expectations. The pronounced decrease in inflation-linked swap rates, across all ... (full story)
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ECB debated risk of low rates for too long: accounts
European Central Bank policymakers debated the risk that ultra-low interest rates pose to banks when they met in March and decided to push back any rate hike to next year, the accounts of the meeting showed. Fearing a sharp slowdown in economic growth, the ECB reversed course last month, delaying a planned interest rate hike until 2020 and giving banks fresh access to ultra cheap central bank funding. "Concerns were voiced that over time, the effects of persistently low rates could depress banks' interest margins and profitability, with negative effects on banks intermediation and financial stability in the ... (full story)