ECB’s monetary policy is taking effect rapidly, says Lane

But chief economist warns tighter financing conditions could cause eurozone contraction

Philip Lane
ECB chief economist Philip Lane

The European Central Bank is seeing rapid transmission of its monetary policy, especially via banking credit, its chief economist Philip Lane said on July 12.

But the eurozone is at risk of an economic downturn, Lane warned the US National Bureau of Economic Research’s summer institute in Cambridge, Massachusetts. Firms’ profits and households’ incomes had so far proved resilient as the ECB tightened policy, but that might change, he said.

“In the absence of new shocks that would drive the

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