DAVOS, Switzerland Jan 25 Euro zone inflation
is "way below target" and deflation is a potential risk for the
bloc, International Monetary Fund Managing Director Christine
Lagarde told the World Economic Forum in Davos on Saturday.
In response, European Central Bank President Mario Draghi
said the ECB stood ready to act if inflation went lower than
forecast and reaffirmed that interest rates would remain low or
go lower for an extended period of time.
Asked about the possiblity of the ECB adopting quantitative
easing policies such as the U.S., British and Japanese central
banks had done, Draghi said: "I'm not saying it should be done
or it shouldn't be done."
The EU treaty prevented monetary financing of governments,
he said. The ECB might be able to buy securitised bank loans if
they could be packaged as asset backed securities in a
transparent manner, which would require regulatory change,