Tuesday, March 13, 2012

ECB Draghi: 'We are alert to the risk of inflation although it's not materializing'

European Central Bank President Mario Draghi said today that the euro zone's economy appears to be stabilizing but inflation risks were not currently materializing as a large output gap remained.

"We are continuously alert to the risk of inflation but this risk is not materializing at the present time," Draghi told a conference in Paris on competitiveness.

He also said the euro zone economy was stabilizing at a low level of activity. Banks should use the improvement in the economic climate, partly due to the ECB's liquidity offering, to build up their balance-sheets, including by retaining their earnings.