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ECB's Draghi promises more eurozone stimulus if needed because of Brexit

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By Euronews
ECB's Draghi promises more eurozone stimulus if needed because of Brexit

<p>The head of the European Central Bank says the eurozone economy could be given a further dose of stimulus if Britain’s vote to leave the European Union starts to have a negative impact.</p> <p>After the Bank’s latest policy meeting, Mario Draghi singled out the Brexit vote as a key risk, and spoke of uncertainty to the economic outlook. </p> <p>He told reporters: “Our assessment is that euro area financial markets have weathered the spike in uncertainty and volatility with encouraging resilience. The announced readiness of central banks to provide liquidity if needed and our current monetary policy measures, as well as a robust regulatory and supervisory framework have all helped to keep market stress contained.”</p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr">Draghi: Financial markets have remained resilient despite Brexit, also thanks to ample liquidity</p>— <span class="caps">ECB</span> (@ecb) <a href="https://twitter.com/ecb/status/756111666086051840">July 21, 2016</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <p>The <span class="caps">ECB</span> now has until its September meeting to see exactly what the economic costs of Brexit are.</p> <p>Draghi spoke after the <span class="caps">ECB</span> Governing Council kept its main interest rate at zero and continued quantitative easing – money printing to buy bonds – at around 80 billion euros a month.</p> <p>He called that asset-buying programme “quite successful” and confirmed it would run until March 2017, or beyond if necessary, until the <span class="caps">ECB</span> sees an upward adjustment of inflation toward its target.</p> <p>As well as Brexit he flagged up the risks from too-slow inflation and a looming banking crisis in Italy.</p> <p>The <span class="caps">ECB</span> is concerned as it is the eurozone’s bank supervisor.</p> <p>Italian banks, weighed down by about a 360 billion euros in bad debt and with their share prices falling.</p> <blockquote class="twitter-tweet" data-lang="en"><p lang="en" dir="ltr"><a href="https://twitter.com/hashtag/ECB?src=hash">#ECB</a>'s Draghi: <span class="caps">NPLS</span> an obstacle to transmission of our monetary policy. <a href="https://t.co/w161OzB9qE">pic.twitter.com/w161OzB9qE</a></p>— Holger Zschaepitz (@Schuldensuehner) <a href="https://twitter.com/Schuldensuehner/status/756113306260238336">July 21, 2016</a></blockquote> <script async src="//platform.twitter.com/widgets.js" charset="utf-8"></script> <p>The Italian government is in talks with the EU to allow state aid to the troubled lenders but wants to shield household investors, a contentious proposal that would test the bloc’s new <a href="http://www.investopedia.com/terms/b/bailin.asp">bail-in rules</a>.</p> <p>Draghi repeated the <span class="caps">ECB</span>’s position that something needed to be done to address the problem of bad loans and also called <a href="http://uk.reuters.com/article/uk-europe-ecb-draghi-npls-idUKKCN1011WP">public backstop</a> in such case “useful” but said this was ultimately between Italy and the European Commission to work out.</p>