Talking and walking

16 January 2014 By Neil Unmack Follow @unmack1

Mario Draghi’s dovish stance has raised hopes the European Central Bank could launch asset purchases. Europe’s fragmented money markets and weak lending mean the payoff could be significant. But it can only be done if France and Italy embrace reform.

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European Central Bank executive board member Benoit Coeure said the central bank had room for further policy measures if inflation expectations in the euro zone fell below its target.

“There is room to cut it if needed,” Coeure told news agency Bloomberg in an interview published on Jan. 16.

“If we have a strong sense that anything impacts the medium-term scenario and moves our medium-term inflation expectation further away from 2 percent, then there would have to be a monetary policy reaction,” he added.

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