The European Central Bank president, who will soon hand over to Christine Lagarde, unveiled a package of long-term measures intended to boost the eurozone's sluggish economy.
[...] But Draghi was defiant, saying the package is a "powerful one both in the short and long term" to address economic risks. He also urged national capitals to take action on fiscal policy to go along with the ECB's measures.
"Governments with fiscal space should act in an effective and timely manner," he said, likely referring to Germany. [...]
Draghi said the measures — including a tiering system to exclude certain banks' excess deposits from negative rates while also envisaging an additional series of cheap loans for banks (known as targeted longer-term refinancing operations) — would benefit lenders. While cheap money tends to benefit Southern European banks, the tiering system will support Northern ones that have bigger levels of excess deposits. [...]
Despite Draghi's big push on Thursday, the ECB is being cautious about the outlook for the eurozone: It has even changed the wording on its policy timeline.
It used to say that interest rates would not rise until mid-2020. But the date has been removed: “The governing council now expects interest rates to remain at their present or lower levels until it has seen the inflation outlook robustly converge to a level sufficiently close to, but below, 2 percent within its projection horizon.”
The change indicates that reaching the eurozone's inflation target will take an indefinite amount of time and the new measures will tie policymakers' hands for the foreseeable future. [...]
Full article on POLITICO
ECB Monetary policy decisions
Mario Draghi, Luis de Guindos: Introductory statement to the press conference
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