Mario Draghi, President of the ECB

Q & A: 22 01 2015 

Question: There’s a big debate at the moment as to whether what matters most is the flow or the stock, the buying of assets or what is already held on the balance sheet. I’m curious as to where you come out on that particular debate.

And second of all, what would you say to those who are concerned that when the ECB is buying up bonds, electronically printing money, whatever one calls it, this is the first chapter in a story that leads inevitably towards hyperinflation. What’s your response to that?

Draghi: On the first point, the way the introductory statement reads says that both things are important. The overall amount but also the scale of these purchases, the monthly flows are quite meaningful, as is the overall amount.

The second question, I think the best way to answer to this is, have we seen lots of inflation since QE programmes started? Have we seen that? And now it’s been quite a few years since they started. Our experience since we have these press conferences goes back to a little more than three years. In these three years we’ve lowered interest rates I don’t know how many times, four or five times, six times maybe. And each time someone was saying this is going to be terribly expansionary, there will be inflation. Some people voted against lower interest rates way back at the end of November 2013. We did OMT. We did the LTROs. We did TLTROs. And somehow this runaway inflation hasn’t come yet.

What I’m saying is that certainly the jury’s still out. But there must be a statute of limitations. Also for the people who say that there will be inflation, yes, when, please? Tell me, within what?

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