FRANKFURT Jan 9 The European Central Bank will
keep a close eye on developments in money markets and stands
ready to act if interbank lending rates rise too high, ECB
President Mario Draghi said on Thursday.
Rising bank-to-bank lending rates can be seen as a sign of
returning confidence, as banks rely less on the central bank and
turn to the market instead, but if the rates rise too fast, too
soon they risk scotching the patchy recovery.
"With regard to money market conditions and their potential
impact on our monetary policy stance, we are monitoring
developments closely and are ready to consider all available
instruments," Draghi told a news conference after the ECB kept
its main refinancing rate at 0.25 percent.
"Overall, we remain determined to maintain a high degree of
monetary accommodation and to take further decisive action if
In August, Draghi said that expectations of rate hikes in
money markets were, according to the ECB's assessment