“Interest rates are coming down again so that should make debt serve burdens a little more sustainable," Knot said at an event held by Bloomberg in New York. He also said the financial system had navigated well the surge in rates launched by top central banks to tackle high inflation pressures.

The ECB cut rates three times already this year from a record high and markets now see cuts at each of its next four or five meetings as growth is flatlining around zero and inflation is lower than forecast.

The European Central Bank must be agile with further interest-rate cuts to avoid the risk of acting too slowly, according to Governing Council member Francois Villeroy de Galhau.