1/28/2019, 3:51 PM (Source: TeleTrader)
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Draghi: Fed started easing 'way before us'

The head of the European Central Bank stressed on Monday that it is not easy to compare monetary policy with that of the United States Federal Reserve due to the difference in the point in the cycle, with regard to quantitative easing. "The US started way before us" and it's been a while since the stance was reversed, Mario Draghi noted in a public hearing at the European Parliament. Another factor is that the Eurozone still didn't complete the banking union and the capital markets union, required to get the financial sector in a similar system, he said.

Answering questions put by members of the Committee on Economic and Monetary Affairs, he estimated there are no direct links between the international role of the euro and monetary policy. Turning back to the ECB's bond purchase program which was abolished at the end of last month, leaving only the reinvestment of proceeds, Draghi highlighted forward guidance as being "date and state contingent." Furthermore, "if things go wrong," rate-setters can employ again "the tools from the toolbox," he claimed.

However, policymakers don't see such contingency materializing and certainly not this year, according to Draghi, whose mandate expires at the end of October.

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