ECB's Coeure: no need for LTRO now, still have rate cut option

Wed Oct 9, 2013 7:10pm EDT
 
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GENEVA (Reuters) - European Central Bank policymaker Benoit Coeure said on Wednesday he saw no need for the ECB to act by launching a new long-term loan measure (LTRO) now, as money market rates are not rising.

Market rates moved higher over the summer on expectations the U.S. Federal Reserve would start unwinding its stimulus. They subsided after the Fed delayed a reduction in its bond purchases but the ECB is watching them closely, concerned that a sustained rise could threaten the euro zone's fragile recovery.

Asked what the ECB could do if the euro zone's recovery falters, Coeure said: "we still need low rates to protect (the) recovery ... we still have the possibility to cut rates and we've been clear on that."

Coeure was answering questions after giving a lecture at the International Center for Monetary and Banking Studies in Geneva.

(Reporting by Emma Farge; Writing by Paul Carrel)

 
Benoit Coeure, executive board member of the European Central Bank (ECB) poses for a photo after an interview with Reuters in Frankfurt February 26, 2013. REUTERS/Ralph Orlowski