The major central banks on the planet should “align” its actions to combat the threat of low inflation, which persists globally. Alignment would also be helpful because divergent monetary policies can create greater volatility on exchange rates and yields. This is the message launched on Tuesday morning by the president of the ECB, Mario Draghi, speaking at the forum organized in Sintra. The number one of the Eurotower did not mention any central bank in particular, but the reference to the Federal Reserve, which fueled the upward expectations on American rates for months.
“By alignment – Draghi specified – I mean one sharing of diagnoses of the dynamics underlying the challenges that concern us all. AND a shared commitment to base our policies on these diagnoses”.
And what are the monetary policy measures to focus on? “We proved that unconventional tools – added Draghi – they can be effective in supporting domestic demand and fueling price pressure even when the deflationary push comes from the global economy”.
Instead, the President of the ECB judges "disappointing" the commitments made by the G20 to increase growth global economy of 2% with agreed structural measures: "It is an example of how intentions and actions can diverge, in contrast to what happened in the case of the global coordination of fiscal action in 2008-2009, which was successful". Draghi stressed that the decisions of the G20 cannot be binding on the countries that are part of it, "but the recognition of the common interest can be a form of coordination".
A path that we must never follow is that of competitive devaluations, which "are losers for everyone", Draghi said again, because they damage the global economy "leading only to wider market volatility in the face of which central banks are forced to react to defend their national mandate".
Not even a word, however, on the victory of Brexit to the British referendum of June 23, which in the last two days has caused a wave of market crashes, prompting the Bank of England, the ECB itself and the other major global central banks to set up safeguard mechanisms.
