Strasbourg (France) (AFP) – The European Central Bank’s bond-buying programme, known as quantitative easing, is the most potent weapon available to tackle eurozone inequality, ECB president Mario Draghi said Monday.
“It is true that the richest are the first to benefit from the effects of QE but at the same time it is the most powerful tool to drive down inequality in the longer term,” Draghi told the European Parliament.
The central bank launched QE almost three years ago, in March 2015, to help firms and power economic growth coming off a global economic crisis but last week Dutch central bank governor Klaas Knot, who sits on the European Central Bank’s governing council, indicated the programme had run its course, prompting price falls on European government bond markets.
Ending the programme would be a major policy shift that could herald the beginning of the end of the cheap money era.
Draghi also turned his attention to the current price slump of top cryptocurrency bitcoin and its fellow digital coins which he dubbed “very risky” forms of investment over which investors and banks alike should exercise extreme prudence.
“Virtual money is subject to strong volatility. Their price is extremely speculative,” Draghi said in his Strasbourg address, underscoring the fact the virtual coins are not regulated.
French and German finance ministers Bruno Le Maire and Peter Altmaier indicated last month that Paris and Berlin wanted to regulate bitcoin and said their countries would be tabling proposals to that effect at a meeting of G20 finance ministers in March.