Draghi gives reassurances on economic recovery

A new programme of long-term refinancing operations to depress borrowing costs, interim arrangements for a bank resolution fund and an assurance Greece does not need a third bailout, were all part of Mario Draghi’s reassurances that the euro and the economic recovery were going in the right direction.

Markets immediately reacted positively with government bonds rising to his messages though he gave very little concrete information on stress tests being planned for banks, and possibly governments, before the ECB takes over its role as banking supervisor at the end of next year.

On foot of ongoing criticisms about the ECB’s role in the troika that has been dictating and overseeing the implementation of austerity policies in programme countries, Mr Draghi said they would not remain there in the longer term. He stressed they provide technical advice while the Eurogroup decides on granting financial aid.