(supersedes previous)European
Central Bank Governor Mario Draghi on Thursday downplayed a
decline in loan demand in Italy and Spain.
The latest figures indicating businesses are unwilling to
take on risk come after "a long sequence of positive data" and
the ECB looks at aggregate data rather than single countries, he
explained.
Draghi added that EU bail-in rules on creditor and
shareholder participation in bank rescues are flexible enough to
work in various different scenarios.
His remarks came after the ECB confirmed monthly purchases
of $80 billion in government paper and said interest rates will
remain flat or come lower for a prolonged period.
The massive bond-buying or quantitative easing (QE)
programme will continue through March 2017 at least, and rates
will stay low after it ends, the ECB said.
The ECB earlier left rates unchanged, with the principal
rate at 0.00%, the bank deposit rate at -0.40% and refinancing
rates at 0.25%.
Draghi said eurozone growth is expected to slow down and
third-quarter growth will likely be flat compared to the second
quarter. The ECB believes "negative interest rates are working",
he said. Draghi's bond-buying program - designed to push
interest rates down while boosting credit - was launched January
22, 2015, and involved 60 billion euros in monthly bond
purchases from across the eurozone. It was originally slated to
end in September 2016.
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