The Governor of the Banque de France calls for this opportunity “to invest in the future”.
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The Governor of the Banque de France, François Villeroy de Galhau, said on Thursday that negative interest rates from the ECB have probably bottomed out and called for the opportunity “to invest in the future”.
“We noted in our December meeting a beginning of economic stabilization which corresponds to a relative reduction of commercial uncertainties,” said the governor, member of the executive board of the European Central Bank (ECB), during an intervention at the Paris Dauphine University.
“If this stabilization is confirmed, there should ensue a stabilization of monetary policy”, he added, after recalling that the ECB had launched an arsenal of measures to support the economy by relaunching the program debt redemption.
“To put it another way, the observed low point of growth justifies a ‘low for longer’ (note: low for longer), but not today a ‘lower for longer'” (lower for longer) , thus implying that they will not drop further.
The governor took the opportunity to recall that negative rates are both a “threat” and an “opportunity”: “a threat if we give in the short term to the facility of abundant liquidity and let financial instability grow” , he warned.
“An opportunity if we collectively use low rates to invest in the future, from ecological transition to education,” said the governor, who once again ruled out that savings be taxed in France to compensate for losses for banks negative interest.
“Clearly, I do not consider it probable, nor desirable, to apply negative rates to individuals – apart from certain large estates – or to SMEs,” he said.
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