Draghi Says Growing ECB Balance Sheet Is Last Stimulus Tool Left

//Draghi Says Growing ECB Balance Sheet Is Last Stimulus Tool Left

Draghi Says Growing ECB Balance Sheet Is Last Stimulus Tool Left

By | 2014-10-11T18:23:12+00:00 October 11th, 2014|Business|0 Comments

President Mario Draghi said
expanding the European Central Bank’s balance sheet is the last
monetary tool left to revive inflation although there is no
target for how much it might be increased.

“It’s very difficult for me to give you an exact figure at
this point in time,” Draghi told reporters in Washington today
during the annual meeting of the International Monetary Fund.
“I gave you a kind of ballpark figure, say about the size the
balance sheet had at the start of 2012.”

The ECB is trying to spur inflation from its lowest in
almost five years as its economy risks sliding into its third
recession since 2008. The central bank’s balance sheet, which
can be boosted by buying assets or accepting collateral in
return for loans, now stands at 2.1 trillion euros ($2.7
trillion) compared with a 2012 peak of 3.1 trillion euros.

Recent interest rate cuts, the offering of cheap loans to
banks and the forthcoming purchase of private-sector assets
should have a sizable impact on the balance sheet, Draghi said.

He denied the ECB is purposefully trying to weaken the
euro, saying it has no target for its value and that its recent
decline reflects international differences in monetary policy.
Draghi also said the ECB sees no serious risk of a bubble in the
sovereign debt market.

To contact the reporters on this story:
Stefan Riecher in Washington at
sriecher@bloomberg.net;
Scott Hamilton in Washington at
shamilton8@bloomberg.net

To contact the editors responsible for this story:
Fergal O’Brien at
fobrien@bloomberg.net;
Emma Charlton at
echarlton1@bloomberg.net
Paul Badertscher, Gail DeGeorge