UPDATE 1-ECB’s Coeure opens door to new cash boost for banks

(Adds detail) NEW YORK, Feb 15 () – European Central Bank board member Benoit Coeure said the ECB was discussing the idea of issuing new multi-year cheap loans to banks, which in some countries face a funding cliff-edge next year when previous loans must be repaid. Banks in Italy and other southern European countries in particular could face funding problems as the ECB’s most recent Targeted Long-Term Refinancing Operation (TLTRO) nears its repayment date in 2020. Speaking in New York, Coeure said a new TLTRO was possible and there might be scope for it but such an operation should serve “a purpose”, likely meaning it should help the ECB achieve its inflation target rather than simply helping banks. “It is possible, we are discussing it,” Coeure said. “But we want to be sure that it serves a…purpose.” He later added: “There might be scope for another TLTRO.” His were the clearest remarks to date on the subject. ECB President Mario Draghi was non-committal at his latest press conference, on Jan 24, simply saying the issue had been raised by some policymakers at that day’s meeting. Coeure, seen as one of Draghi’s possible successors when the latter’s term runs out on Oct 31, added that the euro zone’s recent economic slowdown is more pronounced than earlier expected, suggesting that the path of inflation will also be more shallow. The ECB will next meet on March 7 and policymakers are widely expected to slash growth and inflation projections as the euro zone is suffering its biggest slowdown in half a decade. (Reporting by Trevor Hunnicutt; Writing by Balazs Koranyi; Editing by Francesco Canepa and Hugh Lawson)Our Standards:The Thomson Trust Principles.