ECB defends “Super Mario” after reviews Investors – Management Journal

Several senior officials ECB supported the measures announced yesterday Mario Draghi, although some acknowledged that the bank had complicated your own message to the financial markets.

Mario Draghi. (Photo: AP)

Frankfurt (Reuters) .- The European Central Bank today sought to convince skeptics investors a day after his President Mario Draghi unveiled a new stimulus package but limit its impact suggesting that the ECB would not reduce interest rates.

Several senior officials ECB , both publicly and behind the scenes, they 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 major interest ECB and even a scheme from which could pay the banks to lend money, Draghi surprised investors by suggesting that rule out further rate cuts.

His remarks did raise yields bonds 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 trying to achieve, which is to stimulate credit, which would encourage the expansion to cheapen money for businesses and households in the euro area.

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

on Friday , Vice President of ECB Vitor Constancio took the unusual step of posting your opinion on the website of 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 the charge that the ECB charged to . banks hoard money in it

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

Supporting this line, a source with knowledge of the thought of ECB highlighted the possibilities of a new relief and said he was working to help investors better understand the measures after they had taken the “wrong” on Thursday.

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