ECB's Draghi Says Inflation Rates 'Are Not There'

The video discusses the concept of price stability, defined as an inflation rate close to but below 2%, and the current state of inflation in the euro area. It explains why monetary policy remains accommodative and highlights the potential risks to financial stability due to low or negative policy rates. The video also examines asset valuation, particularly in real estate, and emphasizes that localized phenomena should be addressed with macroprudential tools rather than monetary policy. The role of the ECB and national central banks in implementing these tools is also covered.

What is the defined target for price stability in terms of inflation rate?

• Above 3%

• Exactly 2%

• Close to but below 2%

• Below 1%

What is a potential consequence of prolonged low or negative policy rates?

• Increased inflation

• Financial stability risks

• Higher interest rates

• Decreased asset valuations

In which sector are asset valuations particularly high according to the transcript?

• Technology

• Agriculture

• Automobile

• Prime commercial real estate

What should address localized financial phenomena like high real estate valuations?

• Monetary policy

• Fiscal policy

• Exchange rate adjustments

• Macroprudential tools

Who shares the responsibility for macroprudential tools?

• The International Monetary Fund

• The World Bank

• The European Central Bank and national authorities

• The European Parliament