ECB's Draghi worried about Fed's independence

WASHINGTON (Reuters) - European Central Bank President Mario Draghi expressed concern on Saturday about the U.S. Federal Reserve's independence, warning that a loss of its autonomy could undermine the credibility of policy. U.S.

Reuters April 14, 2019 00:05:20 IST
ECB's Draghi worried about Fed's independence

ECBs Draghi worried about Feds independence

WASHINGTON (Reuters) - European Central Bank President Mario Draghi expressed concern on Saturday about the U.S. Federal Reserve's independence, warning that a loss of its autonomy could undermine the credibility of policy.

U.S. President Donald Trump's nomination of two controversial candidates to the Fed's board and persistent calls for rate cuts has raised the spectre of government interference, challenging a fundamental tenet of modern central banking.

"I’m certainly worried about central bank independence in other countries, especially... in the most important jurisdiction in the world," Draghi said about the United States.

"If the central bank is not independent, then people may well think that monetary policy decisions follow political advice rather than objective assessment of the economic outlook," he told a news conference.

Governments from Turkey to India and the United States have put increasing pressure on their central banks in recent months, igniting a debate about the value of independence.

But some argue that unconventional policy, used widely now, redistributes wealth, so monetary policy makes increasingly political decisions and thus requires increased political scrutiny.

“Within (their) mandate, however, central banks ought to be left free to choose what’s the best way to comply with the mandate," Draghi said. "Because if you don’t let them be free, then they’re not accountable. That’s the central banking framework since the 80s everywhere."

Still, Draghi argued that he saw no similar threat to the ECB's independence given the legal safeguards and he also did not think that cases of interference elsewhere were undermining global confidence.

(Reporting by Balazs Koranyi; Editing by Paul Simao and Andrea Ricci)

This story has not been edited by Firstpost staff and is generated by auto-feed.

Updated Date:

TAGS:

Find latest and upcoming tech gadgets online on Tech2 Gadgets. Get technology news, gadgets reviews & ratings. Popular gadgets including laptop, tablet and mobile specifications, features, prices, comparison.

also read

Oil rises 2% as OPEC complies with production cuts
Business

Oil rises 2% as OPEC complies with production cuts

By Jessica Resnick-Ault NEW YORK (Reuters) - Oil prices strengthened on Wednesday, as OPEC and its allies were seen complying with a pact to cut oil supply in September, even as concerns loomed that recovery in fuel demand will be stalled by soaring global coronavirus cases. Early in the day crude was boosted by a bullish stock market. Even as equities whipsawed on pandemic worries, oil stayed higher, buoyed by expectations that OPEC could staunch a supply glut

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000
Business

Tesla's back-to-back price cuts bring sticker on U.S. Model S below $70,000

By Tina Bellon and C Nivedita (Reuters) - Tesla Inc will further cut the price of its Model S "Long Range" sedan in the United States to $69,420, the electric carmaker's chief executive, Elon Musk, announced in a tweet https://bit.ly/2H0JCP0 on Wednesday. The anticipated drop marks the second time this week Tesla has cut the price for the high-end sedan, following a 4% cut of the Model S's price in the United States on Tuesday to $71,990.

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen
World

Trump cites teenaged son's bout with coronavirus in calling for schools to reopen

By Jeff Mason DES MOINES, Iowa (Reuters) - Under siege over his handling of the novel coronavirus pandemic, President Donald Trump on Wednesday cited what he said was his son's mild bout of the virus as a reason why American schools should reopen as soon as possible. Trump made the comment about his son, Barron, as the president swept into Iowa on a mission to shore up support in battleground states that he won in 2016 but is in danger of losing to Democrat Joe Biden barely three weeks before the election. First lady Melania Trump announced in a statement earlier in the day that the virus that struck both her and her husband had also infected their 14-year-old son