UniCredit CEO discusses digital euro impact on liquidity
UniCredit CEO Andrea Orcel warns the digital euro will affect bank liquidity. He is working with the ECB to ensure the project has no excessive negative impact.
The Chief Executive Officer of UniCredit S.p.A., Andrea Orcel, has expressed a cautious but collaborative approach toward the introduction of the digital euro. Speaking at a financial conference organized by Morgan Stanley in London, Orcel addressed the potential shifts in the banking landscape as the European Central Bank moves forward with its digital currency plans.
Orcel warned that the digital euro could have a negative impact on bank liquidity and profit margins. This concern is primarily due to the potential loss of retail deposits, which currently serve as the most affordable source of funding for commercial banks. The CEO noted that UniCredit is maintaining a high level of interaction with the ECB to ensure that the central bank's pursuit of monetary sovereignty does not result in an excessively negative impact on the private banking sector.
We're relatively constructive.
By engaging directly with regulators, UniCredit aims to help shape a framework where the digital euro can coexist with traditional banking structures without undermining the financial stability provided by retail deposit bases.
