ECB's Mario Draghi Defends Stimulus Program

By Brian Blackstone and Todd Buell 

        FRANKFURT--European Central Bank President Mario Draghi on Wednesday defended the bank's decision to launch a massive stimulus program centered on large-scale purchases of government bonds, saying such policies are a standard part of the tool kits of central banks around the world.
        "Asset purchases are unconventional but they are not unorthodox. In fact they are eminently orthodox," Mr. Draghi said at a conference of economists and central bankers at Goethe University. He said asset purchases are "nothing new" and were even deployed by Germany's Bundesbank in the 1970s.
        Mr. Draghi's remarks came two days after the ECB starting buying large amounts of government bonds and other debt instruments under a program known as quantitative easing.
        The ECB has said it will purchase a total of EUR60 billion ($64.2 billion) a month in eurozone government bonds, debt instruments issues by European Union institutions and private debt instruments between this month and September 2016. The purchases could extend beyond the fall of 2016 if inflation hasn't shown signs of returning to the ECB's target of just below 2%, officials have said.
        Mr. Draghi said the asset purchases should help to boost expectations of future inflation and encourage investors to shift to riskier assets.
        Write to Brian Blackstone at brian.blackstone@wsj.com and Todd Buell at todd.buell@wsj.com
        (END) Dow Jones Newswires

        March 11, 2015 04:34 ET (08:34 GMT)

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