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Dutch bank ING warns against further ECB money printing
THE head of one of Europe's largest banks, ING, has warned of the perils of central bank money printing, saying there is already enough cheap money available and that injecting more will do little to bolster weak confidence.
Ralph Hamers made his plea as central banks redouble efforts to keep the cost of borrowing at historic lows to buoy the economy, a policy that weighs on bank profits and makes it costly to hold deposits.
"I don't think QE is a recipe to support an uncertain environment," Mr Hamers told journalists, referring to so-called quantitative easing to print fresh money. "There is no shortage of money in the market." Although bankers have previously made similar complaints, Mr Hamers' blunt comments carry weight because his bank is one of Europe's largest, with 38 million customers.
ING, the largest Dutch bank, cautioned on Thursday that rock-bottom interest rates would pressure future earnings, as it announced a 1.4 billion euro (S$2.12 billion) net profit in the second quarter of the year.
"Looking ahead, we expect that persistently low interest rates will put pressure on net interest income," Mr Hamers said, referring to the bank's chief earnings pillar from activities such as lending.
European Central Bank President Mario Draghi has all but pledged to loosen monetary policy further amid a continued economic deterioration of Europe's euro currency bloc, still grappling with the aftermath of a debt crisis.
ING also announced that it was bolstering its staff and systems to tackle money laundering, a factor that increased costs. REUTERS