As a reminder, it was in Jackson Hole three years ago that Draghi laid the groundwork for the launch of the ECB's 2.3 trillion-euro asset-purchase program.
They looked pensive before he spoke...
Following Yellen's "unhawkish" nothing-burger of a speech (which has sent the broad dollar index to 2 year lows), all eyes were on whether ECB President Mario Draghi would mention the euro's strength, but he disappointed, instead focusing on global trade and protectionism. Draghi failed to mention policy in general, but did warn regulators (similar to Yellen) that...
When monetary policy is accommodative, lax regulation runs the risk of stoking financial imbalances.
By contrast, the stronger regulatory regime that we have now has enabled economies to endure a long period of low interest rates without any significant side-effects on financial stability, which has been crucial for stabilising demand and inflation worldwide.
With monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the crisis.
Meanwhile, while Draghi is warning about "rekindling the incentives that led to the crisis" with one hand, with the other, the central bankers - i.e. global systemic regulators, are doing this:
Additional headlines:
- *ECB'S DRAGHI SAYS OPENNESS TO TRADE IS UNDER THREAT
- *DRAGHI SAYS POLICIES MUST AIM AT ANSWERING BACKLASH
- *DRAGHI SAYS THE GLOBAL RECOVERY IS FIRMING UP
- *DRAGHI RETURN TOWARD PROTECTIONISM WOULD BE A SERIOUS RISK
But while Draghi did gloat at EU economic recovery, he offered little of note - just like Yellen - therefore tending to confirm the downtrend in the dollar.
Full Prepared Remarks below (link):
http://www.scribd.com/embeds/357226948/content