PARIS (MNI) – European Central Bank President Mario Draghi said
Monday that the ECB cannot act a financial backstop in the Eurozone debt
crisis without breaching its mandate and damaging its credibility.
Draghi, speaking to European parliamentarians in Brussels,
deflected suggestions that the ECB become more aggressive in buying
government bonds or give the European bailout fund access to ECB loans.
“The treaty specifies very closely that our mandate is to ensure
price stability,” Draghi said. Anything that would breach the treaty
“would negatively affect the credibility of our institution. I don’t
think that would be any good for the market confidence in the euro
area.”
Draghi said bond purchases under the ECB’s Securities Market
Program were done to “reactivate” monetary policy in countries where
market turmoil was blocking the transmission of ECB decisions.
The ECB “buys into bonds whenever it sees that monetary policy has
been paralyzed and needs to be reactivated again, not because this or
that country is short of liquidity,” he explained.
–Paris Newsroom, +33142715540; jduffy@marketnews.com
[TOPICS: M$$EC$,M$X$$$,MGX$$$,MT$$$$]
