Mario Draghi Says Misinterpretation Related to Regulations in Not the Cause of Turmoil, It is Mainly Fears Related to Growth
On Monday, Mario Draghi, the European Central Bank President said that the recent volatility in the European bank stocks is mainly due to the markets attitude regarding the global slowdown in growth and not due to misperceptions connected to the approach of financial regulations.
Mario Draghi said, "Current market developments appear to be more related to general factors concerning weakening economic activity."
On Monday, Mario Draghi said the ECB is "ready to do its part" to encourage further growth which added fuel to speculations that policymakers might step up their stimulus program in the coming month.
In a testimony before the economic and monetary affairs committee of European Parliament, Draghi said in case the already skimpy inflation in the euro zone loses momentum further, "we will not hesitate to act."
On Tuesday, the European stocks moved ahead following the news and it is expected the US markets might follow the same on Tuesday as it reopen after the Presidents' Day holiday.
In this month, the investors moved away from bank stocks starting from Italy to Germany as Stoxx Europe 600 Banks Index, which is a measure for forty seven regional companies related to the banking sector lost greater than twenty percent starting from the beginning of the year.
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