Draghi: Global forces contribute to keep inflation low – Il Sole 24 Ore

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This article was published February 4, 2016 at 09:26 hours.
the last change is the February 4, 2016 at 13:37.

“There are forces in the global economy today that, all together, contribute to maintain low the ‘inflation’ and these forces’ may delay the return of inflation toward our goal, “but” there are no reasons why it should lead to an increasingly low rate of inflation. If we will need adopt more expansionary policies to support the economic recovery. ” “If we do not give low inflation – and certainly do not do that – on balance will return to levels in line with our objective.” He said the ECB president, Mario Draghi, in a “lecture” the Bundesbank in Frankfurt.

“Take, instead, an approach of” wait-and-see “and extend the time horizon of our policy has risks, and that is not anchored inflation expectations permanently and, therefore, more and more low inflation rates. If it were to happen we would need much more accommodative monetary policies to reverse this process. From this point of view, the risks of acting too late are superior to those of acting too soon. “

Mario Draghi added that “what is important is that the central banks are acting within its mandate to respect this mandate. In the euro area this could pose different problems than other “major economic areas but” these challenges can be mitigated. Do not justify inaction. “

” There can be no doubt that, if we decided to adopt even more political ‘accommodative, the risk of side effects would not stop there – he said then ECB President -. We always have in mind the need to limit distortions caused by our policies – said Dragons – but the priority is the goal of price stability. This is the meaning of the principle of monetary dominance that is registered in the Treaties, and that makes it credible monetary policy. “

In the eurozone,” there is still no agreement on the third pillar of Banking Union, the guarantee on deposits , which is a fundamental element for a true single currency, “he recalled Mario Draghi, explaining that” for this, the Commission’s proposal to create a European deposit-guarantee scheme is welcome. On the one hand sets the ambitious goal of creating a true European system of protection of depositors, which supports the creation of an internal market for deposits in which their availability is guaranteed regardless of the jurisdiction with a level of confidence in the same deposits everywhere. “

on the other hand, it said Draghi, the proposal of the EU Commission” is realistic and provides a number of safeguards against the “moral hazard” so that the risk-sharing does not become a distribution of risks “. Draghi reiterated that “the reduction of risks and sharing of risks are two sides of the same coin and should be pursued simultaneously: both are essential to protect the stability of the European banking sector and to ensure a smooth transmission of our monetary policy.”

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