The minutes of the last meeting of the entity show a “broad” agreement between the board members, who point to US policy, protectionism, Brexit and a possible correction in the financial markets as the most important risks for the Global economy.
The meeting of the European Central Bank (ECB) that took place on January 18 and 19 did not have major disagreements among the board members of the entity. The reading left by the minutes leaves a sense of unity among the members, and it is remarkable the concern and have for possible measures that can take Donald Trump in the United States. Board members believe that it is important to “engage with open markets and free trade.”
The main risks facing the global economy are “geopolitical development, uncertainty about what policies the new US administration will take, questions that are on the air about the exit of the United Kingdom from the European Union, the increase Of protectionist policies, and the possibility of seeing a new wave of volatility and falls in the global financial markets, “the minutes explain.
The ECB remains optimistic and there was no debate on the positive effects of its monetary policy. The eurozone is growing at a remarkable pace, according to them, as they consider that “the growth between 0.3% and 0.6% that has presented the region since 2014, rather than being a sign of fragility, Is robust in a context of external shocks. ” Although the entity seems satisfied with this growth rate, there was debate about the possibility that the eurozone is approaching the “speed limit” in its growth; Responsible for this would be, in the opinion of the regulators, “the lack of structural reforms” by the governments during the last years.
The entity, as usual, believes that politicians are failing to take advantage of the favorable context that the ECB has created with its monetary measures, to be able to carry out restructuring and policies that support growth and reduce unemployment.
As for the rebound in inflation, there was a “broad agreement” with which is derived from the rise in energy prices, highlighting how there has not been a significant rebound in the price basket that leaves out this factor. However, some board members debated that, “given the evidence from the past, these effects of energy on general inflation may materialize somewhat more lagging behind.”
ECB members are also “satisfied” with the reaction of financial markets when the direction of the QE changed in December, at which time the ECB announced a cut in purchases from April, accompanied by a delay On the deadline for the program, until December 2017.
Earn 1,193 million in 2016, 10% more than in 2015
The entity chaired by Mario Draghi increased profits by 10.2% compared to 2015, gaining 1,193 million euros last year. The regulator distributed January 31st 996 million to the national central banks and tomorrow will give them the remaining 227 million.
The entity’s interest income from assets derived from its monetary policy – the QE asset purchase program, mainly – reached 1,040 million euros, 63% of the total of 1,648 million that the central bank last year. In 2015 the bank entered 890 million euros through this route, 60% of the 1,475 million that entered in total during that year.
The company posted € 370 million of interest from its foreign reserve assets, an increase of 30% from € 227 million in 2015. On the other hand, the ECB has reported that it earned € 225 million for its financial operations, To 214 million last year.
Entities that were monitored by the regulator last year had to pay 382 million euros in total, compared to 277 million a year earlier. However, the regulator points out that his personal and administrative expenses increased to 467 million and 487 million euros, respectively, compared to 441 and 423 million the previous year, an increase due to higher expenses for supervisory functions.