ECB comes out to defend “Super Mario” after criticism from investors – Diario El País

The European Central Bank (ECB) sought to convince skeptical investors on Thursday after its president Mario Draghi unveiled a new stimulus package but limit its impact suggesting that the ECB would reduce interest rates.

Several senior ECB officials, both publicly and behind the scenes, supported the measures announced by Draghi on Thursday, although some acknowledged that the ECB had complicated his own message to the financial markets.

Shortly after announcing the package, which included cuts in three rates of key ECB interest rates and even a scheme from which could pay the banks to lend money, Draghi surprised His comments made investors by suggesting that precluded further rate cuts.

raise yields and caused a rise in the dollar, as investors took them as he was losing capacity the man they call ” super Mario “from that in 2012 promised to” do everything necessary to save the euro “.

the strengthening of the euro and rising bond yields are the opposite of what the ECB is trying to achieve, that is to stimulate credit, which would encourage the expansion to cheapen money for businesses and households in the euro area.

the ECB officials monitoring the situation from behind the scene panicked when markets, which had difficulty understanding the confusing set of ads, concluded that the ECB had run out of ammunition.

on Friday, ECB Vice President Vitor Constancio took the unusual step of publishing their opinions on the web from the bank. The official stressed that while there was a limit to the cuts interest rates, the ability of central banks to act in other ways should not be ruled out.

“Naturally, all policies have limits” Constancio said. “It is the case of the instruments we are using now, this is particularly true in negative interest rates for deposits,” he added, referring to charges that the ECB charges banks that hoard funds in it.

Emphasizing the message Draghi, Constancio added, “is not only bad start downplaying monetary policy, in fact, is dangerous”

Supporting this line, a source with knowledge of thinking. ECB highlighted the possibilities of a new relief and said he was working to help investors better understand the steps that had been taken after the “wrong” communication Thursday.