ECB stimulus package ‘unlikely’ before stress tests

The ECB is likely to refrain from any new stimulus package in coming months as it reviews lenders’ balance sheets, according to sources.

The effect of any measures could be blunted by the reluctance of banks to increase lending during the assessment, the sources said. The health check is scheduled to end in October. An ECB spokesman said the governing council discusses its policy stance every month.

ECB president Mario Draghi unveiled an historic package of policy measures this month, including a negative deposit rate and targeted long-term loans to banks, to fight the threat of deflation in the eurozone. He also said officials may come up with additional stimulus if needed.