ECB's Rehn says policy to remain accommodative for 'quite some time'

A top European Central Bank official said on Tuesday that the current slowdown in the Eurozone economy might be more protracted than what had been expected just a few months before and that monetary policy would need to remain accommodative for "quite some time".

In an interview with Bloomberg, ECB executive board member, Olli Rehn, also said that a recession in the euro area was not the central bank's working assumption.

Rehn said that while policymakers did not want negative official interest rates to become a permanent fixture of the financial landscape, neither did they want to raise them "prematurely, because clearly the slowdown in the world economy and in the European economy indicates we need to maintain an accommodative monetary policy stance still for quite some time.

"[...] Compared to what many people expected at the end of last year -- that this would be a short and temporary slowdown -- it seems from many indicators that this is more durable than a short-term slowdown. But the jury is still out."

On the subject of the third round of cheap financing for lenders from the ECB, which was scheduled to start from September, Rehn said the details of the so-called Targeted Long-Term Refinancing Operations would be would be announced well in advance.

His recommendation was that the terms should be similar to those granted in the previous €700bn round of financing.