ECB’s Schnabel Sees Banks Tapping Refinancing Operations More

(Bloomberg) -- Lenders in the euro zone are likely to turn to the European Central Bank for funding more frequently in the future as policymakers’ stash of bonds is reduced, according to Executive Board member Isabel Schnabel.

For now, excess liquidity in the region remains “ample,” the German official said Thursday in a speech in Frankfurt. But that should change as quantitative tightening continues “steadily and predictably,” she said.

“Banks have started adapting to an environment with less ample reserves,” Schnabel said. “We expect this process to continue as excess liquidity declines further, with banks increasingly sourcing liquidity through our standard refinancing operations.”

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