ECB pays attention to good functioning of
markets, Lagarde says, after France spooks investors
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[June 17, 2024]
PARIS (Reuters) -The European Central Bank pays close attention
to the smooth functioning of financial markets, ECB President Christine
Lagarde said on Monday, after French President Emmanuel Macron's call
for a snap parliamentary vote last week spooked investors. |
![](../images/061724PIX/busine62.jpg)
European Central Bank (ECB) President Christine Lagarde attends a press
conference following the ECB's monetary policy meeting in Frankfurt,
Germany, June 6, 2024. REUTERS/Wolfgang Rattay |
Investors were demanding a 77-basis-point premium for lending to
AA-rated France over triple-A Germany for 10 years in Monday
morning trade, little changed from Friday after climbing 29 bps
last week in its biggest weekly rise since 2011.
Asked if the spread was a concern, Lagarde told reporters at an
event near Paris: "Price stability goes hand in hand with
financial stability. We pay close attention to the smooth
functioning of financial markets, and today we continue to do
so."
Lagarde said bringing inflation down to 2% might seem a trivial
task given current political ructions in Europe but that now was
not the time for the ECB to lose sight of its primary objective.
"If we were to let inflation get out of hand when we're in the
process of bringing it under control and when we've begun this
third stage of the monetary policy process, it would be totally
counterproductive," she said.
European Central Bank policymakers have no plan to discuss
emergency purchases of French bonds and still think it is for
French politicians to reassure investors unnerved by the
prospect of a far-right government, five sources told Reuters.
(Reporting by Leigh Thomas; Editing by Richard Lough and
Bernadette Baum)
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