ECB chief makes first successes of the great flood of money from – Reuters Germany

       

– Frank Siebelt

       

Frankfurt (Reuters) – European Central Bank President Mario Draghi is confronted with the unprecedented flood of money to the banking system of the euro zone on track.

       

He referred on Wednesday in Frankfurt to the initial success of the mammoth program to buy government bonds, which will have a circumference of over one billion euros. Here, the Italians made it clear, in spite of better economic prospects in the currency area was premature throttling of the controversial especially in Germany program planned. The European Central Bank (ECB) has acquired since 9 March bonds. The key interest rate for the money supply by banks maintained the ECB as expected at a record low of 0.05 percent. He is already since September.

       

“There are clear signs that the monetary policy steps that we have taken, are effective,” said Draghi. They would help to improve the prospects for growth in the monetary area further. Also, it would help that again more credits are given. The award-conditions for loans to firms and households have already gotten noticeably better – the demand for loans to take. Inflation is expected to move in this way back towards the target of the central bank rate of two percent. Until then, there is still a long way – in March, inflation was in the euro zone even at minus 0.1 percent

       

sacrificing ultra-loose monetary policy will not make Draghi. “Our focus will be on the full implementation of our measures.” It is premature to speculate about when the monetary policy stance will change. The economic outlook had recently brightened considerably. The International Monetary Fund (IMF) just raised its forecast for economic growth in the euro zone this year from 1.2 to 1.5 percent in 2016 from 1.4 to 1.6 percent.

       

Total debt purchases by 60 billion euros are scheduled to September 2016 per month. The program, which is technically known as “QE” (QE) is said to have a total volume of 1.14 billion euros. In March, the ECB and the national central banks government bonds, debentures acquired (“covered bonds”) and mortgage-backed securities (“ABS”) for around 61 billion euros.

       

The buy-back program has clearly driven the returns of many European government bonds down. But this is Draghi’s calculus: if banks sell because of low yields state title, they could make more use released funds for lending. This is good for the economy and thus the economy – and should ultimately drive up inflation. Fears in some bonds could be just the offer, Draghi dismissed. “We see no problems,” said the ECB chief.

       

Draghi’s press conference was interrupted by Arnold Böcklin an incident. Shortly after the beginning of his speech at the Frankfurt ECB headquarters jumped a woman on the podium. She screamed in English “ECB Dictatorship” (“The ECB’s dictatorship”). She was overwhelmed by security forces. A spokesman for the Frankfurt police said it was a 21-year-old from Hamburg been taken into custody. You will now be asked. On the Internet, the protest group FEMEN known about the action, which campaigns for the rights of women.

       

Continued …