Draghi flags ECB's readiness to act

JERUSALEM, June 18 Tue Jun 18, 2013 2:15am EDT

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JERUSALEM, June 18 (Reuters) - European Central Bank President Mario Draghi flagged the central bank's readiness to act as recent signs of stabilisation in the euro zone mean that its interest rates are a more effective tool again.

Speaking at a farewell conference for Bank of Israel Governor Stanley Fischer in Jerusalem, Draghi said there were numerous measures the ECB could and would deploy if needed, saying the ECB stood "ready to act".

Some may have unintended consequences, but this did not mean that they should not be used, Draghi said.

"Monetary policy has regained steering capacity, which had become lost for large parts of the euro area in mid-2012. This is an important positive development," Draghi said in the text of a speech.

"I do not think that we are materially challenged in our ability to deliver our objective of price stability by the low level of interest rates," Draghi said.

"There are numerous other measures - standard interest rate policy and non-standard measures - that we can deploy and that we will deploy if circumstances warrant," he added.

"We will look with an open mind at these measures that are especially effective in our institutional setup and that fall within our mandate," he added.

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