ECB’s Draghi calls for policy ‘alignment’ among central banks

Central banks around the world should aim to align their monetary policies to mitigate “destabilizing spillovers” between economies, European Central Bank President Mario Draghi said on Tuesday.

“Monetary policy has inevitably created destabilizing spillovers as well, especially when business cycles have been less aligned,” Draghi said at an ECB forum in Sintra, Portugal, citing large exchange rates fluctuations and swings in capital flows as examples.

He added: “We may not need formal coordination of policies. But we can benefit from alignment of policies. What I mean by alignment is a shared diagnosis of the root causes of the challenges that affect us all; and a shared commitment to found our domestic policies on that diagnosis.”

Source: Reuters