- Mario Draghi, ECB President
The European Central Bank stands ready to act and broaden its asset-purchases programme to drive inflation higher as fast as possible, ECB Head Mario Draghi said. He also warned about the difficult economic situation in the Euro zone, where growth remained weak and no improvement in the coming months was expected. Any new measures would follow a flow of steps since June that included interest-rate cuts, long-term bank loans, and covered-bond buying. Draghi did not rule out a possibility of buying government bonds and said after this month's monetary policy meeting that ECB staff have been told to consider further measures to boost the region's economy if needed. The ECB is trying to expand the size of its balance sheet to its early-2012 levels, signalling an increase of as much as 1 trillion euros to help restore the Euro area's economy. Gross domestic product grew just 0.2% last quarter and inflation is running at 0.4%, well below the ECB's goal of just under 2%.
However, not all ECB's Governing Council members may support expanded measures. Governing Council member Klaas Knot questioned effectiveness of QE, while Bundesbank President Jens Weidmann has repeatedly criticised large-scale sovereign-debt purchases, as they muddy the line between fiscal and monetary policy.
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