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April 09, 2015

Washington, D.C., April 9, 2015 - The European Central Bank Governing Council will be faced with both good news and bad news leading into its next monetary policy meeting on April 15, according to the IIF's updated version of "Draghi's Dashboard".

"The good news is that financial variables overall have held up well since the last meeting in early March with our financial variables staying firmly in "˜green' territory", said Felix Huefner, chief economist of global macroeconomic analysis at the IIF. "Even better news is that the real economy has shown further signs of improvement since last month. The bad news is that the monetary stimulus has yet to be reflected in any improvement in inflation indicators. Our inflation sub-index remains firmly in "˜red' territory."

The Dashboard includes 17 selected financial, real economy and inflation variables which are aggregated into three components to monitor the transmission of the monetary impulse through the Euro Area economy.

The Dashboard evaluates to what extent monthly movements in each of these variables are in line with the ECB's objectives using a "traffic light" color code; dark green indicates movement in line with the ECB's intentions and dark red the opposite.

On the financial side, the IIF noted the continued decline in bank interest rates for non-financial corporates, indicating that the very favorable environment on financial markets is continuing to filter through to lending conditions.

On the activity side, the IIF noted that the further increase in business sentiment as measured by the Manufacturing Purchasing Managers Index stands out. Stronger demand, coupled with easier lending conditions, also showed up in a marked improvement in bank lending, in particular to corporates.

The IIF reported that the weak spot remains the inflation picture. Headline inflation stayed negative and core inflation remains barely above '½ percent. Inflation expectations have risen only slightly since January and remain very subdued.

The IIF will release an updated version of the Dashboard coinciding with future ECB monetary policy meetings.

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The Institute of International Finance is the global association of the financial industry, with close to 500 members from 70 countries. Its mission is to support the financial industry in the prudent management of risks; to develop sound industry practices; and to advocate for regulatory, financial and economic policies that are in the broad interests of its members and foster global financial stability and sustainable economic growth. IIF members include commercial and investment banks, asset managers, insurance companies, sovereign wealth funds, hedge funds, central banks and development banks. For more information visit www.iif.com.

Media Contacts

Dylan Riddle

Tel: +1 202.857.3626

Email: driddle@iif.com

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