Lagarde: Limited tightening of credit could make ECB's job easier

European Central Bank President Christine Lagarde said a limited tightening of credit could make the ECB’s job easier. European Central Bank President Christine Lagarde backed U.S. Treasury Secretary Yellen’s views. Lagarde, who faces pressure to raise interest rates further in the euro zone to combat inflation, said a limited tightening of credit could make the ECB’s job easier. “If banks don’t lend so much and if they manage their risks, that could reduce the work the ECB has to do to bring down inflation. But if they cut lending too much, that would put undue pressure on growth,” Lagarde said. “If the U.S. defaults, there would be dire consequences for the world,” Lagarde said in an interview on Sunday. “I have great confidence in the U.S. I can’t believe they would allow such a big disaster to happen.” "If it happens, it would have a very, very negative impact not only on this country where trust would be shaken, but also worldwide. I understand politics, I am in politics. But there are times when the best interests of the nation must prevail," Lagarde said.