The European Central Bank is watching for signs of stress in the bank sector from the ongoing financial turmoil but a full-blown crisis is unlikely for now, the ECB's top brass said on Wednesday.
Investors are pondering whether the ECB will be able to continue raising rates to fight inflation given turmoil in the banking sector that has seen two U.S. lenders go under and Swiss giant Credit Suisse need a last-minute rescue.
Pierre Wunsch, Belgium's central bank chief, took a similarly relaxed view, arguing that strong supervision has kept the bloc's banks healthy. She reaffirmed the ECB's determination to bring inflation in the euro zone to 2%, from 8.5% last month, and noted past hikes were only just starting to be passed onto the economy.
The central bank for the 20 countries that share the euro raised rates last week but removed from its policy message an expectation that it would increase rates again at upcoming meetings in light of the recent financial jitters.
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