Rabobank’s Global Daily flags comments from Dutch European Central Bank (ECB) presidential candidate Klaas Knot, who told the Financial Times that the ECB would not hesitate to act if circumstances require. He suggested that in a future crisis of a different nature, the ECB might develop another, more tailored instrument, raising questions about how far policy support could extend.

Knot hints at future ECB flexibility

“It’s also notable that the Dutch candidate to replace ECB President Lagarde, Klaas Knot, gave an interview to the Financial Times in which he stated, “If circumstances require it, we will not hesitate to take action.””

“He wasn’t referring to 50bps rate hikes due to geopolitically driven inflation but in the opposite direction, where if Europe were to see a future crisis “of a different nature,” he “would not rule out developing another, more tailored instrument.””