ECB President Mario Draghi. Photo: Michael Probst / AP
ECB’s deliberations will focus on two different areas.
On one hand, the ECB review the transfer of low imported inflation to domestic prices and pricing and inflationary expectations. It depends on the size and persistence of the decline in oil prices, he said.
And secondly, the Governing Council to analyze how well the transmission of monetary policy works to the financial system, particularly banks.
– If either of these two factors pose a downside risk to price stability, we will not hesitate to act, said Mr Draghi.
the world economy is the slowdown in the emerging countries of focus. Structural problems have been found and a rebalancing of these economies is required, which can lead to headwinds in the global economy.
The large case in bank stocks reflects the sector’s high sensitivity to weaker economic growth. There were fears that some banks are exposed to greater risk in the commodity producing sectors.
The downturn has reinforced the impression that the banks must do more to adapt their business models to an environment of lower growth and lower interest rates.
– But the review of the acquis since the beginning of the crisis has laid the foundations for a sustainable improvement of the resistance not only individual banks but also of the entire financial system, said Draghi.
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