Draghi Defends Bond Purchases With Warning of Deflation
This article is for subscribers only.
European Central Bank President Mario Draghi defended his plan to buy government bonds in the German parliament today with a warning about deflation risks.
The ECB’s so-called Outright Monetary Transactions “will not lead to inflation,” Draghi told lawmakers in Berlin in a closed-door session, according to a text provided by the ECB. “In our assessment, the greater risk to price stability is currently falling prices in some euro-area countries,” he said. “In this sense, OMTs are not in contradiction to our mandate: in fact, they are essential for ensuring we can continue to achieve it.”