Mario Draghi hints at stimulus measures to come but says post-Brexit market too uncertain to make decision at the moment

 
Caitlin Morrison
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Draghi was tight-lipped on which stimulus measures he would use if needed (Source: Getty)

ECB president Mario Draghi said Eurozone markets had weathered the post-Brexit market volatility spike with "admirable resilience".

Draghi was speaking at a press conference after the ECB decided to maintain rates at its first meeting since the UK's Brexit vote in June.

While he praised central banks and "robust" regulation for keeping market stress constrained after the British referendum, Draghi also hinted that new stimulus measures could be on the horizon, stating the bank's governing council "will act by using all the instruments available within its mandate," if necessary.

However, Draghi said the bank did not yet have enough information to assess the underlying macroeconomic conditions in Europe following the Brexit vote - adding that the governing council had not yet discussed the specific instruments that it might use in response.

The central bank chief said the outcome of the UK's EU referendum was one of the geopolitical uncertainties that is threatening the Eurozone's economy, and said it would be impossible to give a certain outlook on the Eurozone's fortunes, as it will very much depend on how long the EU-UK negotiations take: "It's too early to say what the final impact will be." The only thing that can be said, he added, is that the Brexit vote represents a downside risk.

All in all, the ECB boss issued a positive statement on the fortunes of the Eurozone, and said he expected a "message of a recovery that continues, though of a slower pace, in the midst of great uncertainties" to emerge at the G20 finance chiefs meeting in China this weekend.

Meanwhile, Draghi pointed to the possibility of a bank rescue system with the suggestion that struggling Eurozone banks could be helped by a "public backstop", a creation that would be "very useful", he said.

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