Germany’s top central banker is seen as a supporter of a strict monetary policy.
(Photo: Reuters)
Frankfurt Despite the fears of a new financial crisis, Bundesbank chief Joachim Nagel is in favor of further increases in interest rates in the euro zone. “Our fight against inflation is not over yet,” he told the Financial Times.
He still feels that “price pressures are strong and broad-based across the economy.” “There is still a long way to go, but we are approaching the restrictive area,” he said, referring to interest rate levels. The Governing Council member also argued that the European Central Bank (ECB) must resist calls for a rate cut after it has stopped raising rates.
Nagel does not rule out that European banks will now become more cautious in lending after the turbulence surrounding the ailing Credit Suisse and the bankruptcy of Silicon Valley Bank. However, he does not currently fear a credit crunch. It is “too early” to come to this conclusion.