On Monday November 17, ECB President Mario Draghi met with Members of the European Parliament (MEPs) active in the Economic and Monetary Affairs Committee (ECON). While pleased with the credit-easing measures package, planned purchase of covered bonds and asset-backed securities by the ECB as well as with the progress in terms of the emerging Banking Union, he urged the ECON MEPs to stay on their toes. "No time for complacency”, he added.
The challenges on the road ahead include the shifting of risks from the increasingly regulated banking industry to the non-banking sector (shadow banking), slow growth and lack of investment. In countering these, Draghi will reportedly not shy away from “unconventional instruments if needed.”
Completing the Banking Union and putting the Single Resolution Mechanism (SRM) into practice are regarded as necessary to get the Eurozone back on track.
However, it remains to be seen whether these instruments will be genuinely “unconventional” and not simply new measures to be implemented at the expense of European citizens – as has been known to happen in the past. In this regard, MEPs vigilance is indeed vital.
Please find here the European Parliament's press release.