© Reuters. FILE PHOTO: European Central Bank (ECB) President Christine Lagarde speaks during a news conference following the ECB’s monetary policy meeting in Frankfurt, Germany March 16, 2023 .REUTERS/Heiko Becker
FRANKFURT (Reuters) – The European Central Bank remains ready to support eurozone banks with loans if needed, ECB President Christine Lagarde said on Sunday, adding that bailing out Credit Suisse through the Switzerland had been “instrumental” in restoring calm to the markets.
Investors are worried about the impact of the Credit Suisse debacle on eurozone banks despite repeated assurances from the ECB that lenders in the 20 countries that share the euro are sound.
Lagarde reiterated that eurozone banks were “resilient, with strong capital and liquidity positions”, but said the central bank was ready to intervene if necessary.
“Our policy toolbox is fully equipped to provide liquidity support to the euro area financial system if needed and to preserve the smooth transmission of monetary policy,” she said in a statement.
In the past, the ECB has provided banks with ultra-cheap multi-year loans called targeted longer-term refinancing operations, as well as emergency liquidity support, which can be provided by the 20 national central banks in the area. euro against a wider range of guarantees.
Lagarde praised “the rapid action and decisions taken by the Swiss authorities”, who orchestrated the takeover of Credit Suisse by its rival UBS.
“They are essential to restore orderly market conditions and ensure financial stability,” she said.