What's Left for the European Central Bank to Do?

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July 16 (Bloomberg) -- Michael Plavnik, head of the Stirt desk at Citigroup, reviews actions taken by the European Central Bank and looks at what tools they still have available. He speaks on Bloomberg Television's "On The Move."

At is becoming the new it term by the central banks.

They did not that rates.

Last time they cut the rate, it had no impact on financial markets.

We know they will not do any quantitative easing or bond purchases unless somebody signs up for the programs.

What is left for the ecb to do?

Forward guidance is something that mario draghi is keen on saying he has done.

The markets are very keen on it.

You do not have other central bankers saying that we will revisit every month.

Were you confused by that message?

He was given plenty of opportunity to expand on it and he said, it is not six months or 12 months, it is sometime in the future.

We had the commission come out and say it is more than 12 months.

A lot of people want to give out their opinion and voice and qualify the message better.

At the end of the day, they are not giving a specific target and nobody wants to lock themselves in.

One of the lessons we learned with mark carney, he actually hiked one month early.

They say it is conditional commitment.

That is going to question forward guidance, that it does not have the impact they want.

Talk to me about what your main concern in europe is.

You fear that the ecb does not have enough tools.

Maybe what i am looking for is that the markets team to jump and get scared very quickly, yields jumping two or three basis points on portugal.

Portugal is small.

We are dealing now with spain.

Is there a concern that markets will jump on any political uncertainty in southern europe?

As we go through this efficacy of austerity, why have not a lot of these government -- why have a lot of these governments not had more issues?

A country like greece or portugal or ireland into a deep recession, probably the deepest since world war ii.

Air is just no other choice.

Am i concerned?

I am a little bit concerned about the political outcomes.

If the markets are able to shrug off the haircut to cyprus, italian elections, there seems to be an underlying guidance from policymakers and central banks that they will make the right decision.

Are you going to be more nervous post german elections?

If anything, i think i would be more relaxed the cousin it gives a little bit -- once she has been elected, she is able to get done what needs to get done without having the immediate backlash or the political capital to do it.

She has to have some sort of coalition government where the coalition is more pro-europe.

You are cautious europe and positive on the u.s. and the uk.

Is that because mark carney is in charge?

Or is it because we are not having as big a recession as we thought we are going through?

We have not seen the futures into the primary study yet.

I am not a weatherman, but we saw a seasonality in uk economy with the weather in itself.

When we have had nice weather, we have seen it bounce back in the numbers.

We are starting to see the housing numbers.

One of the interesting conundrums that policymakers are stuck in is that none of them have been able to regenerate -- to generate growth in different ways.

They have to create growth in the same sectors we had before through quantitative easing, through the wealth effect.

In the uk, that will happen through the stock market.

That is the only way to replace wrote.

Those things have to -- the place growth.

Those things have to go up.

What does it mean for your ideal portfolio?

You are quite heavily invested in equities?

One of the conundrums we are seeing is policymakers unable to regenerate growth in a lot of developed countries.

They have to go back to the create wealth effect.

That will have an effect in equities.

We know that a lot of them are not doing qe right now.

In the uk tomorrow, i think we will see an 8-1 vote against qe.

In the u.s., they are doing tapering.

The result, you have to do bullish things that will work through the channels, equities and heart -- and housing.

Thank you very much.

Coming up, the commodity slide continues to hit miners.

This text has been automatically generated. It may not be 100% accurate.

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