ECB Governing Council Press Conference - 16 March 2023

Inflation is projected to remain too high for too long. Therefore, the Governing Council today decided to increase the three key ECB interest rates by 50 basis points, in line with its determination to ensure the timely return of inflation to the 2% medium-term target. The elevated level of uncertainty reinforces the importance of a data-dependent approach to the Governing Council’s policy rate decisions, which will be determined by its assessment of the inflation outlook in light of the incoming economic and financial data, the dynamics of underlying inflation, and the strength of monetary policy transmission. The Governing Council is monitoring current market tensions closely and stands ready to respond as necessary to preserve price stability and financial stability in the euro area. The euro area banking sector is resilient, with strong ca tweet at 9:17am: ECB: Inflation Too High for Too Long ECB: Data Dependent Approach Needed ECB: Stands Ready to Act As Necessary ECB: Banking Sector Resilient ECB: Toolkit Fully Equipped ECB: Governing Council Is Monitoring Current Market Tensions Closely and Stands Ready to Respond As Necessary https://t.co/ULUy8YSeSa tweet at 9:17am: #ECB IS READY TO RESPOND ON PRICE STABILITY, FINANCIAL STABILITY - BBG *ECB: TOOLKIT EQUIPPED TO PROVIDE LIQUIDITY SUPPORT IF NEEDED *ECB: TPI IS AVAILABLE FOR UNWARRANTED, DISORDERLY MARKET MOVES

tweet at 8:43am: ECB TOLD MINISTERS TUESDAY SOME EU BANKS COULD BE VULNERABLE tweet at 8:44am: *ECB'S GUINDOS SAID EU LENDERS MUCH LESS EXPOSED TO SVB FALLOUT *ECB'S GUINDOS SAID CONFIDENCE SLUMP COULD TRIGGER EU CONTAGION tweet at 8:45am: Ecb's de guindos: there is no room for complacency on the eu banking system.'Some EU Banks May Be Vulnerable' - ECB Tells Ministers 'No Room For Complcency' The world was saved there briefly overnight after SNB's giant liquidity shot into CS. But it didn't take long fort reality to sink in about the band-aid-like nature of this facility. However, the situation under the hood may in fact be worse than some thought as Bloomberg reports, according to people familiar with the talks, that ECB Vice President Luis de Guindos told finance ministers on Tuesday that some European Union banks could be vulnerable to rising interest rates. Guindos said that the ECB couldn’t rule out that some lenders might be at risk because of their business models, according to the people. The market did not like that reality check with European IG credit spreads now above yesterday's highs...

tweet at 9:48am: ECB'S LAGARDE: MONITORING MARKET TENSION CLOSELY tweet at 9:49am: *LAGARDE: ECB FORECASTS WERE FINALIZED IN EARLY MARCH tweet at 9:50am: ECB PRESIDENT CHRISTINE LAGARDE: 'INFLATION IS PROJECTED TO REMAIN TOO HIGH FOR TOO LONG' #ecb #europeancentralbank #interestrates #monetarypolicy #christinelagarde tweet at 9:54am: ECB’s Lagarde: Economy to Recover Over Coming Quarters - Industrial Production Should Pick Up - Labour Market Strong - Government Energy Aid Should Be Temporary, Targeted - Important to Roll Back Support Measures Promptly tweet at 9:56am: ECB’s Lagarde: Underflying Price Pressures Remain Strong - Services Inflation Driven by Past Energy Increases - Wage Pressures Strengthened - Most Meansures of Long Term Inflation Expectations Stand Around 2%

tweet at 10:04am: ECB’s Lagarde: Financial Market Tensions Have Been Severe - Reiterates ECB’s Data-Dependent Approach Going Forward - If Baseline to Persist When the Uncertainty Reduces, Will Have a Lot More Ground to Cover - This is a Big Caveat tweet at 10:05am: LAGARDE: IMPOSSIBLE TO DETERMINE WHAT THE RATE PATH WILL BE tweet at 10:05am: MORE ECB'S LAGARDE: DEFLECTS QUESTION ON WHETHER RATES HAVE PEAKED; REFERS TO POLICY STATEMENT #ecb #europeancentralbank #interestrates #monetarypolicy #christinelagarde tweet at 10:06am: *LAGARDE: STAND READY TO RESPOND TO PRESERVE PRICE STABILITY tweet at 10:08am: ECB’s Lagarde: Can Exercise Creativity In Short Order If There Is A Liquidity Crisis -But This Is Not What We Are Seeing

tweet at 10:11am: Ecb's president lagarde: 3-4 didn't support decision. tweet at 10:10am: ECB’s Lagarde: Not Waning on Our Commitment to Fight Inflation - Given Uncertainty, Better to Make Decision That We Believe Is Robust - Determined to Return Inflation to 2% - Board Proposed No Other Option - Was Adopted by Very Large Majority tweet at 10:13am: ECB’s Lagarde: 3-4 Didn’t Support Decision - Dissenters Wanted More Time to Monitor Situation - No Tradeoff Between Price and Financial Stability - Stand Ready to Provide New Facilities if Needed - Euro Liquidity Is Perfectly Addressed tweet at 10:27am: #ECB LAGARDE: DIDN'T DECIDE ANYTHING ON APP ROLLOFF - BBG