Thursday, December 1, 2011

ECB\'s Mario Draghi warns of increased \'downside risks\'

Mario Draghi, president of the European Central Bank (ECB), has told the European Parliament that \"downside risks\" to the eurozone economic outlook have increased.

He also said that temporary measures by the ECB, such as buying up government debt, would be limited.

In doing so, he restated the bank\'s central role of controlling inflation.

Mr Draghi said a \"fundamental restatement\" of the region\'s fiscal rules was key to restoring confidence.

\"What I believe our economic and monetary union needs is a new fiscal compact - a fundamental restatement of the fiscal rules together with the mutual fiscal commitments that euro area governments have made,\" the new ECB president said.

It was time to \"adapt eurozone design with the requirements of monetary union\", he added.

He also said the ECB was aware of the \"continuing difficulties\" for banks, particularly in raising capital.

On Wednesday, the central banks of some of world\'s biggest economies announced a plan to ease tensions within the global financial system by helping commercial banks.

The plan aims to make it easier and cheaper for banks to obtain US dollars. This should, the banks hope, trickle down and make it easier for businesses and households to get access to finance

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