Christian Noyer

Claire Jones

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Draghi hearing

ECB president Mario Draghi returns to Brussels on Monday to speak in front of the Committee on Economic and Monetary Affairs at the European Parliament.

The hearing begins at 16.30 local time (15.30 GMT) and will be broadcast live on the ECB’s website.

The European Central Bank’s governing council (the executive board plus the governors of the eurozone central banks) and general council (as before but also including the heads of other EU central banks) meet on Thursday. One doubts there will be much Christmas cheer on offer between Christian Noyer and Sir Mervyn King. 

Claire Jones

The European Central Bank’s reluctance to ramp up its government bond purchases has led to it being viewed as the most conservative, most dogmatic of the major central banks.

True, as evinced by the miniscule scale of last week’s bond purchases, the ECB has been far less amenable than its counterparts to do anything with a mere whiff of monetary financing attached to it. But the view of the ECB as unbending is unfair when it has been far more willing, and quicker, to relax the terms on which it provides banks with cash than either the Bank of England or the Federal Reserve.

As Christian Noyer, governor of Banque de France, said last week, the move to expand massively the ECB’s support for banks by not only introducing unlimited three-year loans but broadening the list of eligible collateral, was “our bazooka”. He also suggested that the funds borrowed from the ECB could be used to buy government bonds.

That the ECB is far more comfortable with such a “bazooka” than a more direct solution such as, say, capping yields on government debt, may owe much to one of the more arcane aspects of the history of the eurozone’s central bank.