European Central Bank Forum Speeches

Mario Draghi, President of the ECB

Muted inflation expectations

“We see growth above trend and well distributed across the euro area, but inflation dynamics remain more muted than one would expect on the basis of output gap estimates and historical patterns.”

Challenges to reflation

“monetary policy is working to build up reflationary pressures, but this process is being slowed by a combination of external price shocks, more slack in the labour market and a changing relationship between slack and inflation. The past period of low inflation is also perpetuating these dynamics”

Monetary accomodation still needed

“While there are still factors that are weighing on the path of inflation, at present they are mainly temporary factors that typically the central bank can look through. However, a considerable degree of monetary accommodation is still needed for inflation dynamics to become durable and self-sustaining.”


Mark Carney, Governor of the Bank of England

Firming global growth

“The Bank of England estimates that more than 80% of the world economy is now growing above potential. Global measures of industrial production and capital goods orders, as well as world trade, have strengthened markedly over the past year…With that more favourable outlook, investment intentions are now rising around the world”

Easing on the horizon

“Some removal of monetary stimulus is likely to become necessary if the trade-off facing the MPC continues to lessen and the policy decision accordingly becomes more conventional.”


Stephen Poloz, Bank of Canada Governor on CNBC

On the initiatives by the US government

“Well we’ve given up modelling specific initiatives because it’s taking some time to come into focus and we think whenever something concrete is tabled we’ll have then time to do the modelling and understand it. I think at the company level people have just been weighing this extra layer of uncertainty about the future…those uncertainties are holding back investment decisions even though investment is picking up. It’s picking up less than it would without that uncertainty. So it’s a bit of a headwind.”

ECB President Q & A June 8th 2017

ECB President Mario Draghi

The ECB has not discussed normalization

“You asked me about normalisation: was it being discussed? The answer is no.”

Rates not expected to go lower

“if you ask me now, “What do you expect?” I would say that based on a current assessment, current information, I don’t expect lower interest rates. If you ask me, “But in case things were to worsen, are you ready to lower interest rates?” the answer is yes.”

On inflation

“nothing has substantially changed as far as inflation is concerned. There is going to be also in the coming months, by the way, a significant amount of volatility due to oil prices and food prices, but the underlying inflation is basically staying what it is today. So what we see now, based on the current information, is a path of low inflation, underlying inflation, and flat across time…the risk of deflation has dissipated.”

ECB Press Conference 8th June 2017

Mario Draghi – President of the ECB

Don´t expect rates to go lower

“we decided to keep the key ECB interest rates unchanged. We expect them to remain at their present levels for an extended period of time, and well past the horizon of our net asset purchases.”

A stronger growth momentum

“The information that has become available since our last monetary policy meeting in late April confirms a stronger momentum in the euro area economy, which is projected to expand at a somewhat faster pace than previously expected….Incoming data, notably survey results, continue to point to solid, broad-based growth in the period ahead. ”

Inflation has not picked up

“the economic expansion has yet to translate into stronger inflation dynamics. So far, measures of underlying inflation continue to remain subdued…. At the same time, measures of underlying inflation remain low and have yet to show convincing signs of a pick-up, as unutilised resources are still weighing on domestic price and wage formation. Underlying inflation is expected to rise only gradually over the medium term….the risk of deflation has dissipated”

GDP growth revised upwards

“These projections foresee annual real GDP increasing by 1.9% in 2017, by 1.8% in 2018 and by 1.7% in 2019. Compared with the March 2017 ECB staff macroeconomic projections, the outlook for real GDP growth has been revised upwards over the projection horizon.”

ECB President Mario Draghi in Brussels

Increasingly Solid economic growth

The economic upswing is becoming increasingly solid and continues to broaden across sectors and countries. Real GDP in the euro area has expanded for 16 consecutive quarters, growing by 1.7% year-on-year during the first quarter of 2017. Unemployment has fallen to its lowest level since 2009. Consumer and business sentiment has risen to a six-year high, supporting expectations of a further strengthening of growth in the coming months.”

Inflation is subdued

“Despite a firmer recovery, and looking through the volatile readings in HICP inflation over recent months, underlying inflation pressures have remained subdued. Domestic cost pressures, notably from wages, are still insufficient to support a durable and self-sustaining convergence of inflation toward our medium-term objective.”

Monetary accomodation set to continue

“For domestic price pressures to strengthen, we still need very accommodative financing conditions, which are themselves dependent on a fairly substantial amount of monetary accommodation.”

ECB Press Conference 27th April 2017

Mario Draghi, President of the ECB
Solid recovery…
“Incoming data since our meeting in early March confirm that the cyclical recovery of the euro area economy is becoming increasingly solid and that downside risks have further diminished. At the same time, underlying inflation pressures continue to remain subdued and have yet to show a convincing upward trend.”
…That is expected to continue
“Euro area real GDP increased by 0.5%, quarter on quarter, in the fourth quarter of 2016, following a growth rate of 0.4% in the third quarter. Incoming data, notably survey results, bolster our confidence that the ongoing economic expansion will continue to firm and broaden. The pass-through of our monetary policy measures is supporting domestic demand and facilitates the ongoing deleveraging process. The recovery in investment continues to benefit from very favourable financing conditions and improvements in corporate profitability.”
On Inflation
“Headline inflation has been recovering from the very low levels seen in 2016, largely owing to higher energy price increases. ….Looking ahead, on the basis of current futures prices for oil, headline inflation is likely to increase in April and thereafter to hover around current levels until the end of this year. However, as unutilised resources are still weighing on domestic wage and price formation, measures of underlying inflation remain low and are expected to rise only gradually over the medium term, supported by our monetary policy measures, the expected continuing economic recovery and the corresponding gradual absorption of slack.
Receding risk of trade protectionism
“One has to be very tentative in this, one thing that may have come out of the meetings is that perhaps the risk of trade protectionism may have somewhat receded.”

Miscellaneous Quotes from week to 10th February

ECB President Mario Draghi on CBS news and News Talk

No need to relax regulations

“Frankly, I don’t see any reason to relax the current regulatory stance which has produced a much, much stronger banking — and, generally, financial services — industry than we used to have before the crisis. The idea of repeating the conditions of before the [global financial] crisis is very worrisome. If we were to look at historical experience and ask what are the main reasons for the financial crisis starting in 2007 onwards, well, one can disagree [over] whether it was too expansive monetary policy or the dismantling of financial regulation in previous years – but surely we can agree it was a combination.”


Alibaba CEO Jack Ma on Business Insider

Trade is important

“If trade stops, war starts…We have to actively prove that trade helps people to communicate. And we should have fair trade, transparent trade, inclusive trade.”


Bank of England governor Mark Carney on the Independent 

Central banks´ time is up

“In many respects we’re coming to the last seconds of central bankers’ fifteen minutes of fame which is a good thing… In general it’s a much better balance than the only game in town being central banks and monetary policy. This is positive,”

ECB President Mario Draghi speech at the European Parliament

Conditions are improving in Europe

“On the one hand, the evidence suggests that the acute deflation risks have disappeared and that inflation is set to pick up over the coming years. And contrary to a widespread perception, euro area economic conditions have also been steadily improving…And in the last quarter, the recovery has been broadening across sectors and across countries.”

…as inflation picks up

“The pickup in headline inflation in December and in January largely reflects sizeable upward base effects and recent increases in energy prices. So far underlying inflation pressures remain very subdued and are expected to pick up only gradually as we go on. This lack of momentum in underlying inflation reflects largely weak domestic cost pressures. The still significant degree of labour market slack and weak productivity developments are weighing down on wage growth.”

Euro area subject to global risk

“Looking ahead, risks to the euro area outlook remain tilted to the downside and relate predominantly to global factors. Our current monetary policy stance foresees that, if the inflation outlook becomes less favourable, or if financial conditions become inconsistent with further progress towards a sustained adjustment in the path of inflation, the Governing Council is prepared to increase the asset purchase programme in terms of size and/or duration.”

Low interest rates have an impact on banks

“Low (and negative) rates might dent bank profits through the narrowing of net interest margins. At the same time, in supporting the recovery, accommodative monetary policy reduces delinquency and default. It thus improves the credit quality of firms and households. This improved credit quality in loan portfolios – together with increasing intermediation volumes – is certainly positive for banks. It has been a key factor sustaining banks’ earnings over the last year. Moreover, low longer-term interest rates increase the market value of financial assets held by banks. This, in turn, results in capital gains that further support bank profitability. This aggregate picture masks some heterogeneity within the banking sector.”

He doesn’t think there are asset bubbles presently

“Currently, we do not see compelling evidence at the euro area level of stretched asset valuations. Both corporate bond spreads and equity prices appear to be broadly in line with fundamentals. Similarly, real estate price growth remains moderate in the area as a whole, although significant cross-country heterogeneity is observable. This assessment is corroborated by the fact that credit growth is still modest, which suggests that asset price developments are not accompanied by increasing leverage.”

European Central Bank (ECB) Press Conference October 2016

ECB rates unchanged and expected to stay lower for longer

“… the interest rate on the main refinancing operations and the interest rates on the marginal lending facility and the deposit facility will remain unchanged at 0.00%, 0.25% and -0.40% respectively. The Governing Council continues to expect the key ECB interest rates to remain at present or lower levels for an extended period of time, and well past the horizon of the net asset purchases.”

Asset purchases to continue but at a reduced rate

“…we will continue to make purchases under the asset purchase programme (APP) at the current monthly pace of €80 billion until the end of March 2017. From April 2017, our net asset purchases are intended to continue at a monthly pace of €60 billion until the end of December 2017, or beyond,”

Slightly stronger growth globally

“The pass-through of our monetary policy measures to the real economy is supporting domestic demand and has facilitated deleveraging. Improvements in corporate profitability and very favourable financing conditions continue to promote a recovery in investment. Moreover, sustained employment gains, which are also benefiting from past structural reforms, provide support for households’ real disposable income and private consumption. At the same time, there are indications of a somewhat stronger global recovery.

..but dampened Growth in Europe

“…economic growth in the euro area is expected to be dampened by a sluggish pace of implementation of structural reforms and remaining balance sheet adjustments in a number of sectors. This assessment is broadly reflected in the December 2016 Eurosystem staff macroeconomic projections for the euro area, which foresee annual real GDP increasing by 1.7% in 2016 and 2017, and by 1.6% in 2018 and 2019. Compared with the September 2016 ECB staff macroeconomic projections, the outlook for real GDP growth is broadly unchanged. The risks surrounding the euro area growth outlook remain tilted to the downside.”

Inflation expected to pick up 

“Looking ahead, on the basis of current oil futures prices, headline inflation rates are likely to pick up significantly further at the turn of the year, mainly owing to base effects in the annual rate of change of energy prices. Supported by our monetary policy measures, the expected economic recovery and the corresponding gradual absorption of slack, inflation rates should increase further in 2018 and 2019.”

El País Interview Mario Draghi, President of the ECB

A modest recovery in Europe 

“The recovery – albeit modest – is robust. We are growing and inflation is improving. Europe’s GDP has returned to its pre-crisis level, although this has taken seven and a half years…The main drivers behind this recovery have been low oil prices and our monetary policy. This recovery is stronger than past ones because it is based on the increase in consumption and domestic demand, and not only on exports.”

Politics has been and will continue to be a major influencer

“Indeed, political uncertainty is dominant. This year we have suffered a multitude of uncertainties: first there was the slowdown in China and the stagnation of world trade, then the Brexit referendum and the election in the United States. The key question is how much this political uncertainty is going to affect the economic recovery…In the medium term it is not yet clear what the consequences of past, current and future political uncertainty will be. There will be consequences, that much is certain.”

On Brexit

“The longer the negotiations take, the longer the uncertainty. It will be more difficult for investors and other economic agents in the UK to make decisions. Now, the impact of course is going to be stronger on the UK than it is on the EU and on the euro area, but certainly the UK is a large economy, so it will have an effect here too.”

There are no bubbles in the Euro area

“We are monitoring financial stability risks, but we see no bubbles in the euro area. There are house price increases in Milan, Barcelona and some German cities, but they are selective and limited to specific areas. In order to speak of bubbles there must be a hike in prices and strong increases in lending. We are not seeing that dynamic. Lending is growing, but at rates of 3%, not at the 15% we saw before the crisis.”

Having weighed the pros and cons of low interest rates, low rates are essential for recovery

“We are aware that low interest rates affect the interest rate margins of some banks, but they also have positive effects on bank profitability by supporting the recovery, reducing loan losses and increasing the valuation of assets. We also cannot deny that some people, like pensioners without debt who rent their homes, may be hurt by low interest rates. The only honest answer that we can give them is that the low interest rates are essential for a full recovery, and when this is achieved interest rates will rise.”

Full transcript at:

Collection of Quotes from week to 11th November 2016


JPMorgan CEO Jamie Dimon in a memo to employees

There is deep frustration around that needs a listening ear

“We are going through a period of profound political and economic change around the world, and American citizens showed that deep desire for change in voting to elect Donald Trump as the 45th President of the United States. We have heard through democratic processes in both Europe and the United States the frustration that so many people have with the lack of economic opportunity and the challenges they face. We need to listen to those voices.”

A pledge for unity

“We have just been through one of the most contentious elections in memory, which can make it even harder to put our differences aside. But that makes it more important than ever to bind the wounds of our nation and to bring together Americans from all walks of life. Recognizing that our diversity is a core strength of our nation, we must all come together as fellow patriots to solve our most serious challenges.”


Starbucks CEO Howard Schultz in a letter to employees

He is stunned

“Last night, like so many of you, I watched the election returns with family and friends. And like so many of our fellow Americans – both Democrats and Republicans – I am stunned.”

The impact is yet to be known

“We cannot know what the precise impact will be on our country and the rest of the world. I am hopeful that we will overcome the vitriol and division of this unprecedented election season.”


Starbucks CEO Howard Schultz in a

We have heard through democratic processes in both Europe and the United States the frustration that so many people have with the lack of economic opportunity and the challenges they face. We need to listen to those voices.


Ewald Nowotny, ECB Governing Council member at the ECB conference

ECB at the ready

“We are definitely prepared to intervene in an emergency. What that will really look like, we must wait and see.”


Peter Praet, ECB’s chief economist at the ECB conference

Calmness Needed

“I think we have to be calm – calmer than the markets certainly. It’s too early to react to such events and we are closely monitoring the situation. I think all communication on monetary policy has not changed and will not change as a result.”