Draghi: No Need to Deviate on Policy Guidance Wording

The transcript discusses the challenges of asset purchases in segmented financial markets, the impact of negative interest rates, and their effects on bank profitability. It evaluates the current monetary policy, emphasizing the need for substantial monetary accommodation to achieve inflation targets. The outlook for the economy is improving, but a reassessment of the policy stance is not yet warranted.

What makes asset purchases more challenging in segmented national financial markets?

• They have no impact on financial conditions.

• They are easier to implement.

• They are the first choice of monetary policy.

• They are more complex and likely to produce side effects.

Why were negative interest rates considered a step into uncharted waters?

• They were a common practice.

• They were implemented in a largely bank intermediated financial system.

• They had no effect on the economy.

• They were the only option available.

How have negative interest rates affected bank profitability?

• They have had no impact on bank profitability.

• They have reduced bank profitability, but this was offset by easier financial conditions.

• They have increased bank profitability.

• They have led to a complete collapse of bank profitability.

What is the current assessment of the inflation outlook?

• Inflation has already reached the desired level.

• Inflation outlook remains conditional on substantial monetary accommodation.

• Inflation is not a concern for monetary policy.

• Inflation is expected to decrease significantly.

What is required before altering the current monetary policy stance?

• No further assessment is needed.

• A complete overhaul of the financial system.

• Sufficient confidence that inflation will converge to the target.

• Immediate changes to interest rates.