Skip to main content
The Globe and Mail
Support Quality Journalism
The Globe and Mail
First Access to Latest
Investment News
Collection of curated
e-books and guides
Inform your decisions via
Globe Investor Tools
Just$1.99
per week
for first 24 weeks

Enjoy unlimited digital access
Enjoy Unlimited Digital Access
Get full access to globeandmail.com
Just $1.99 per week for the first 24 weeks
Just $1.99 per week for the first 24 weeks
var select={root:".js-sub-pencil",control:".js-sub-pencil-control",open:"o-sub-pencil--open",closed:"o-sub-pencil--closed"},dom={},allowExpand=!0;function pencilInit(o){var e=arguments.length>1&&void 0!==arguments[1]&&arguments[1];select.root=o,dom.root=document.querySelector(select.root),dom.root&&(dom.control=document.querySelector(select.control),dom.control.addEventListener("click",onToggleClicked),setPanelState(e),window.addEventListener("scroll",onWindowScroll),dom.root.removeAttribute("hidden"))}function isPanelOpen(){return dom.root.classList.contains(select.open)}function setPanelState(o){dom.root.classList[o?"add":"remove"](select.open),dom.root.classList[o?"remove":"add"](select.closed),dom.control.setAttribute("aria-expanded",o)}function onToggleClicked(){var l=!isPanelOpen();setPanelState(l)}function onWindowScroll(){window.requestAnimationFrame(function() {var l=isPanelOpen(),n=0===(document.body.scrollTop||document.documentElement.scrollTop);n||l||!allowExpand?n&&l&&(allowExpand=!0,setPanelState(!1)):(allowExpand=!1,setPanelState(!0))});}pencilInit(".js-sub-pencil",!1); // via darwin-bg var slideIndex = 0; carousel(); function carousel() { var i; var x = document.getElementsByClassName("subs_valueprop"); for (i = 0; i < x.length; i++) { x[i].style.display = "none"; } slideIndex++; if (slideIndex> x.length) { slideIndex = 1; } x[slideIndex - 1].style.display = "block"; setTimeout(carousel, 2500); }

Isabel Schnabel, seen here at the Old Opera house in Frankfurt, Germany on Nov. 22, 2019, says potential medium-term indications amid looming coronavirus fear is unclear at the moment.

RALPH ORLOWSKI/Reuters

Two top European Central Bank policy makers signalled growing worries about the coronavirus threat on Thursday, though there was no sign the bank was rushing to cut euro zone interest rates again.

Concerns that the virus could send hard-hit countries like Italy and potentially the wider euro zone back into recession have, in recent days, seen financial markets price in another modest ECB rate cut by the end of the year.

“All of us are very worried about what is currently happening with respect to the spread of the coronavirus,” one of the bank’s Executive Board members, Isabel Schnabel, said during a speech in London.

Story continues below advertisement

“But what we really need to understand when we are doing monetary policy is what are the potential medium-term implications, and at the moment this is unclear.”

The coronavirus, which first emerged in China, has seen a major outbreak in northern Italy over the last week, while Germany and France warned on Wednesday that it was likely to be the start of an epidemic.

It comes after a year in which Europe has been hit by a bitter U.S.-China trade dispute and worries that some of its biggest sectors could be next in Washington’s crosshairs.

Klaas Knot, the head of the Dutch central bank and who is seen as one the ECB’s most hawkish members, also expressed his concerns in Amsterdam.

“Although it is still too early to accurately measure the impact of this pandemic, it is safe to say that the hit to the global economy will be more severe”, Knot said at a speech.

“SARS sent ripples across the global economy, wiping $40 billion off world equity markets. But since the SARS outbreak, China has grown from the world’s sixth largest economy, to the second biggest”.

The ECB is due to publish new economic forecasts at its next meeting in two weeks time. Though there is still much uncertainty over how the virus progresses, they are likely to acknowledge the virus impact.

Story continues below advertisement

BofA cut its world growth forecast on Thursday to the lowest level since the peak of the global financial crisis in 2009 and also chopped its European inflation projections - the area the ECB is mandated on.

Other data also showed that bank lending to euro zone companies was stuck at a two-year low last month even before the virus worries had reached current levels.

“To my mind we currently do not have yet a sufficient understanding of what the medium-term implications are,” Schnabel said in panel discussion after her speech.

In response to a question on how monetary policy can respond, she added: “If it turns out that the coronavirus becomes more persistent...we cannot look through it.”

Coronavirus information
Coronavirus information
The Zero Canada Project provides resources to help you manage your health, your finances and your family life as Canada reopens.
Visit the hub
Report an error
Due to technical reasons, we have temporarily removed commenting from our articles. We hope to have this fixed soon. Thank you for your patience. If you are looking to give feedback on our new site, please send it along to feedback@globeandmail.com. If you want to write a letter to the editor, please forward to letters@globeandmail.com.

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff. Non-subscribers can read and sort comments but will not be able to engage with them in any way. Click here to subscribe.

If you would like to write a letter to the editor, please forward it to letters@globeandmail.com. Readers can also interact with The Globe on Facebook and Twitter .

Welcome to The Globe and Mail’s comment community. This is a space where subscribers can engage with each other and Globe staff.

We aim to create a safe and valuable space for discussion and debate. That means:

  • Treat others as you wish to be treated
  • Criticize ideas, not people
  • Stay on topic
  • Avoid the use of toxic and offensive language
  • Flag bad behaviour

Comments that violate our community guidelines will be removed.

Read our community guidelines here

Discussion loading ...

To view this site properly, enable cookies in your browser. Read our privacy policy to learn more.
How to enable cookies