City AM reports this morning on an Analysis forum in Milan yesterday where Andrea Enya, the ECB’s chief supervisor, said commercial banks might be caught unprepared when the unwinding of ultra-loose monetary policy starts. ‘’Market conditions are now very favourable [but] banks are not paying sufficient attention to this. To see banks are not yet issuing [paper] massively worries me a little.’’ Reminding how the Italian government last year saw credit dry up suddenly after the general election he added, ‘’that should teach banks that market windows must be rapidly seized.’’ Other commentators are warning that negative interest rates are hurting banks’ bottom line.
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