ECB's Villeroy Hints at Hike: Deposit Rates Targeting 2% by Summer

ECB Chief Hints at Further Rate Cut in Summer

Francois Villeroy de Galhau, Governor of the Bank of France and a member of the European Central Bank (ECB) Governing Council, has suggested that the central bank could reduce its deposit rate to 2% by this summer.

Sector Consolidation for European Banks

Villeroy also emphasized the importance of sector consolidation among European banks to enhance their global competitiveness.

Recent Rate Cut and Future Expectations

In January 2025, the ECB cut its deposit rate by 25 basis points to 2.75% in response to concerns about sluggish economic growth, despite ongoing inflation pressures.

Policymakers have indicated that a further reduction is likely in March. Villeroy's comments align with these expectations, suggesting that the ECB is committed to supporting economic activity while balancing inflation risks.

Francois Villeroy de Galhau attends the 55th annual World Economic Forum (WEF) meeting in Davos, Switzerland.