IMF, Lagarde: it is crucial to maintain support measures

"It is crucial to avoid withdrawing support policies prematurely, both on the monetary and fiscal fronts."

This was stated by the president of the ECB, Christine Lagarde, in her speech at the meetings of the International Monetary Fund.

"Since the previous IMF meeting in October 2020 - said Lagarde - the global economic outlook has improved thanks to the progress of vaccination campaigns and the vigorous support policies provided to our economies.

    However, this rosier outlook continues to be a considerable uncertainty. , which also concerns the evolution of the pandemic and the scale of vaccinations ". 

Economic support measures provided during the pandemic helped to keep European household and business debt defaults "remarkably low", however banks "face greater risks to asset quality and their profitability remains low. ".

This was stated by the president of the ECB, Christine Lagarde, in her speech at the meetings of the International Monetary Fund.

Lagarde also dwelt on non-bank financial intermediaries, whose vulnerabilities "have increased": overall the financial system is now more vulnerable, "because optimism on the financial markets is in contrast with corporate balance sheets weakened" by the pandemic crisis.

The president of the ECB has called for the continuation of measures to support families and businesses, while keeping them "as temporary as possible, and increasingly targeted".

Supervisors - Lagarde explained - will have to "ensure that capital buffers can be used, if necessary, to absorb losses" and "at the same time banks must be proactive in identifying and managing credit risk".

As for the non-bank financial sector, hitherto called 'shadow banking', "it needs to be made stronger through reforms of the regulatory environment, given the growing role of these intermediaries in financing the real economy and their interconnection with the early days of the financial system ".