Look at the most important came in a speech Mario Draghi
2017-08-23 05:36 pm | No Views : 290
European Union (ECB) President Mario Draghi said Wednesday that monetary and fiscal policy measures over the past decade have made the world more resilient to financial crises, but central banks should continue to prepare for new challenges.
"When the world changes as it did 10 years ago, fiscal policies, especially monetary policy, have to be adjusted," Draghi said in a speech to a group of Nobel Prize-winning economists in Lindau.
"Such adjustments, which were not easy, require an honest and unbiased assessment of the new reality, looking at clear eyes, not linked to the defense of old economic theories that have already lost any power to them.
Draghi said policymakers should be aware of gaps in existing financial policies, adding that it was often sudden shocks that highlighted the shortcomings of those policies, and monetary policy makers should therefore look at existing theories differently from the past.
Draghi also noted that the policy flexibility of the central banks in research and reports submitted to them is less likely to be exposed to crises and easier to explain to the general public, both non-specialized and non-economic.
The policy makers at the ECB are struggling with the dilemma posed by strong growth momentum in the euro area on the one hand, and low inflation on the other.
Although economic expansion has bolstered growth prospects and risk aversion has been broadly balanced against those expectations, it has not yet translated into a stronger inflationary picture. ECB monetary policymakers were very cautious in choosing their own words, to avoid this The kind of market disruptions that occur as a result of the interpretation of some words and signals in the wrong way.
Draghi is due to speak at the US Federal Reserve's Jackson Hole seminar in Wyoming on Friday, and markets will closely monitor his speech for evidence of what awaits monetary policy in the eurozone.
The ECB president and his colleagues are expected to drop any hints of a gradual withdrawal from the monetary stimulus program in September, and the actual decision will be in October. Economists expect a potential reduction in the asset purchase program to begin next January, Assets worth 60 billion euros a month.
Draghi praised that the front-line directives towards open policies and quantitative easing policy have been successful and effective, both in the European region and in the United States of America.
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