European Central Bank head Mario Draghi again defended the ECB’s bond-buying program Tuesday, saying the crisis backstop was more important now following recent market turbulence sparked by other central banks around the world.
Draghi said in a speech in Berlin that the offer to buy bonds issued by indebted countries “is even more essential now as we see potential changes in the monetary policy stance, with associated uncertainty, in other jurisdictions of the global economy.”
The U.S. Federal Reserve has roiled markets by indicating it could taper off its emergency stimulus measures next year. The Fed has been buying longer-term bonds in the open market, which drove down long-term interest rates and sent stocks and bonds higher.
Meanwhile, Chinese authorities have tried to rein in excessive lending, leading to a spike last week in interbank borrowing rates. Japan has also said it will add large monetary stimulus. Draghi did not mention any central bank by name.
Draghi said that the ECB’s exit from its own stimulus measures “is still distant, since inflation is low and unemployment is high.”
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