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This article was published on Oct. 10, 2015 at 9:38.
The last change is the October 10, 2015 at 10:22.
LIMA – The European Central Bank is currently assessing the possibility of strengthening the monetary stimulus in against downside risks to both inflation is the growth in the eurozone, said yesterday its president Mario Draghi, who, however, declined to give any indication of its time.
“We are assessing – has Draghi said at a press conference – the strength and persistence of the factors determining these risks. If we see that the normalization is too far removed in time, the program has the flexibility to be adjusted in size, composition and duration. ” Many of these factors are external, such as lower energy prices and the weakening of the emerging countries. Eurozone inflation is back below zero (-0.1%) in September, far away from the lens to get close to 2% and the ECB expected to remain very low for several months, before rising in 2016 and 2017 and growth remains small. The assessment of the ECB, said the Italian central banker, not depend on a single indicator or from a single vantage point. Draghi also said that the board has not discussed the possibility of further lower the interest rate on deposits of banks with the ECB itself (today to -0.20%), which markets many believe a more effective instrument of strengthening the program purchase of securities, the so-called Qe.
Dragons, together with the ECB Benoit Coeuré adviser, met with the chairman of the Federal Reserve, Janet Yellen, and his deputy Stan Fischer (that of the Italian central banker was one of the masters at MIT in Boston) but “I did not ask,” he joked, the timing of the next increase in interest rates in the United States. The uncertainty about the Fed’s move is a major source of uncertainty for the scenario of the world economy and potentially the financial market volatility. In a speech to the IMF, the head of the ECB he had said yesterday that the eurozone countries with high debt (one of them is Italy) should be alert to the risks related to a reversal of the current low rates ‘interest. The economies of the eurozone and the US are in different positions, said Draghi, with stronger recovery in America, then monetary policy will follow “a divergent path.” For his part, Fischer said in the day that the Fed, more than ever, takes account of international factors in its decisions.
The most important of these factors at the moment is the slowdown in China and other emerging countries, contributing to increasing uncertainty also on the European scene, found Dragons. The case of China has been the focus of much of the discussion in the meetings of the G-20, the IMF and the meetings of the bankers here in Lima. Draghi has made a judgment that is overall positive. The picture painted by the Chinese authorities and the IMF, which confirmed its growth forecast for China’s economy to 6.3 in 2015 and 6.8% in 2016, is “balanced and reassuring,” said the president ECB, despite the “complex change in course” policy in Beijing, including the exchange rate regime, the strengthening of the banking system and the correction of the problem of suffering. In general, it appeared that there was an official part in these meetings an effort to present a positive assessment of developments in China, after the G-20 in Ankara, when it was turned off just the echo of market turmoil and the difficulty of the Chinese authorities to handle the situation, the concern was palpable.
Draghi confirmed that the ECB is working on Greek banks, with a review of asset quality and stress tests 4 major institutions, which should be completed later this month. Next, start the recapitalization in two stages, to a maximum total of 25 billion euro, already allocated in the third bailout signed last July by Athens and its European partners. Will be reviewed, said the head of the ECB, the governance of the Greek banks. “We are quite confident that if all these things are done and is approved legislation to address the problem of high levels of suffering, banks can resume their role of financing the economy,” said Draghi.
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