Lagarde: "The ECB has a whole battery of exceptional tools to use"

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March 31, 2021 "Markets can test us as much as they want": the ECB has "exceptional tools to use, and it has a whole battery of them," ECB President Christine Lagarde told Bloomberg Surveillance. 

It will take "a long time" before the ECB reduces its monetary stimulus: the rise in yields seen in recent weeks is not accompanied by a rise in inflation ", added Lagarde. Asked if the ECB can already in June to return to reducing the pace of purchases of the PEPP pandemic program, currently above 20 billion euros a week, Lagarde replied "my definition of the medium term is a little different from yours.

For us it means a couple of years.

And this is in line with the expectations for the recovery, for the return to the pre-Covid economic situation, which we estimate

 "We expect a quick use of the Next Generation Eu and we very much hope that it will start in the second half of 2021", said Lagarde.

"I think there is really good progress" on the ratification processes and on the development of national recovery and resilience plans.

"We know that there is an appeal to the German Supreme Court that we hope will be dealt with quickly, in order to be certain. I do not want to anticipate the decisions, but I hope that a way can be found to respect what was agreed upon in July, and which has already been voted on by numerous parliaments ", said the president of the ECB, about the launch of the Recovery Fund.

"Sometimes we hear from banks that they feel over-regulated and over-capitalized," but in this crisis "it was good for them and for the safety of their customers. And this is a major change from what happened 10 years ago ", said the president of the ECB.

Fighting climate change "is a big component of our strategic review and when it is over we will be able to see how the ECB can become a Green Central Bank and move towards a greener portfolio", said Christine Lagarde.