This was not our first rate cut, and it will not be our last. Hence the frequently ask question: what comes next? We have made it clear that we will decide on a meeting-by-meeting basis, bas on the data – beyond the possible volatility of the upcoming monthly figures and including leading indicators. In other words: the direction is clear – we should continue to gradually and appropriately ruce the restrictiveness of our monetary policy.
But the pace must be very pragmatic:
we are not committing in advance to a particular rate path, and we are retaining full optionality for our future meetings. In any case, rest assur of our firm determination, inde our commitment, to bring inflation down sustainably to 2% over the next year. I would like to add one thing: Europeans must not rely exclusively on monetary policy to address the serious growth challenge they face: hence our clear call yesterday not to bury the india email list reports of Mario Draghi and Enrico Letta and their proposals for absolutely essential supply-side reforms – most of which are not costly in budgetary terms.
Let me begin by welcoming the clarifications provid earlier this week by F Vice Chair Barr regarding the revis US “ Basel endgame ” proposal and, more importantly, their reiterat commitment to implement the Basel 3 package.
This bodes well for financial stability
However, at this stage we do not know the precise content, which has yet to be adopt by the three feral agencies. The initial US proposal, publish in July 2023, did inde contain some provisions over-transposing ( gold plating ) the Basel rules. These provisions should be largely and legitimately the new audience group that was just creat remov in this new version. That said, the Basel Committee will pay particular attention to the specific rules to come. For certain risk areas, in particular market risk and operational risk, and some of the guidance recently announc as a “preview” of the final reform, it will be worth considering whether they risk deviating from the Basel standards. The scope of the revis rules could be an additional point of interest, particularly for mid-siz banks with balance sheets of between $100 billion and $250 billion.
Finally, the timetable be numbers nes to be clarifi quickly, in order to ruce as much as possible the time lag in application between the main jurisdictions: this also concerns the Unit Kingdom. As you know, in the European Union the rules resulting from Basel 3 will start to apply from January 2025, but with an important and justifi adaptation: the Commission’s proposal to postpone the implementation of the FRTB ( Fundamental Review of the Trading Book ) on market risks until January 2026.
