Understanding your lane, managing turning points - Speech by Governor Gabriel Makhlouf - Les Rencontres Économiques d’Aix-en-Provence

Summary

In the summer of 2012, with bond markets pricing in a chance of a euro breakup, Mario Draghi pledged to do “whatever it takes” to preserve the currency union. It worked: spreads fell, though the programme behind the pledge, Outright Monetary Transactions (OMT), was never used. Despite having no formal relationship with national fiscal authorities, the central bank stepped in because markets had doubts about some governments’ solvency, and this threatened the monetary union’s existence. We are...