Pride will keep the ECB sidelined - BAML

Thursday’s meeting is too early for the ECB to get in an activist mood again, BAML says

Going back to the drawing board immediately after having delivered another

layer of accommodation – even if it was received as insufficient by the market –

is not going to be an appealing option for the ECB. True, one could return

Draghi’s comments straight to him: if a central bank’s credibility must be

judged by its capacity to deliver on its mandate, here price stability, and not

on its willingness to stick to a particular stance or instrument – the point he

used to justify the U-turn on the deposit rate – then there is no reason why the

Governing Council should request a "decency delay" before acting again if the

situation requires it. Still, institutions have their pride, and we

suspect that a prejudice to see the December package as sufficient for some time

will inform the Governing Council’s approach to the news-flow.

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