ECB's Draghi Destroys Hopes For Future Rate Cut, Scoffs At Risks To Bank's Balance Sheet

Business Insider

European Central Bank President Mario Draghi spoke to reporters in Frankfurt this morning.

He's explained why the bank decided to hold rates steady at 1.00% earlier today, and will be detailing his expectations for price stability in the coming months.

In particular, his comments about the upside risks to price stability generated by an influx of money to the banking system kept analysts abuzz with chatter that another rate cut is not forthcoming anytime soon.

Most Wall Street researchers had previously argued that a rate cut was likely early this year, if not in the first quarter then certainly in the second. That would bolster a still fragile and contracting eurozone economy, for which the ECB has also reduced its growth expectations.

Also of note were Draghi's criticisms of journalists and economists that have been concerned about the ECB's exposure to the potentially risky bank debt it has been accepting as collateral for cheap loans.

" At this time to say that the risks to the ECB's balance sheet are higher than the risks to the Federal Reserve or the Bank of England is not correct," he said, citing the large assets that the ECB maintains on its balance sheet.  

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