PARIS (Reuters) – ECB policymaker Francois Villeroy de Galhau on Friday urged firms not to tap their banks for more liquidity than they really need, likening such firms to households hoarding pasta due to the coronavirus outbreak.
Villeroy, who is also governor of the Bank of France, said the ECB’s crisis response measures would ensure that all the liquidity companies need was available.
“We smiled at people rushing to stores to buy up packets of noodles, but honestly, big groups that draw on liquidity lines they don’t need, and that are available in any case, is not any more justified,” Villeroy told French radio BFM Business.
“It costs them money, it needlessly absorbs banks’ capacities – so everyone should stay reasonable and stay calm. The liquidity is there and will stay there.”
Since the coronavirus outbreak in Europe, the ECB has launched a range of liquidity facilities aimed at businesses. On Wednesday it decided on a 750 billion euro ($808 billion) emergency bond purchase scheme.
Villeroy said that, combined, the measures offered an “unlimited” source of liquidity to protect the economy as it struggles with the fallout from the pandemic.
He added that the bond purchase plan had “all the necessary flexibility” to be used quickly and to target particular sectors or countries.
(Reporting by Leigh Thomas; Editing by Kevin Liffey)