AYLESBURY, England (Reuters) - Major central banks did not face calls to do more to boost the world economy when Group of Seven finance officials met on Saturday, European Central Bank President Mario Draghi said.
Before the meeting Britain’s finance minister, George Osborne, said ministers would “consider what more monetary activism can do to support the recovery” - something that he is keen for the Bank of England to do.
But Draghi said the ECB, which cut interest rates to a record low last week, did not come under pressure to take further steps.
“There wasn’t any call to do more,” he told reporters after the meeting. “It is quite clear that all central banks have done a lot, each one within its own mandate. So (the meeting) was just taking note of this ... All of us have really been active.”
The ECB is also looking at whether it can do more to promote small business lending in the euro zone via asset-backed securities (ABS), but Draghi said the central bank was better placed to assist other European institutions rather than take a leading role itself.
ABS allow banks to move some credit risk off their balance sheets by packaging loans up and selling them on to other investors. Credit markets were paralyzed during the financial crisis when such securities became toxic due to the default of housing loans that underpinned them.
“What is the role of the ECB in this? I think it is mostly catalytic, because the ECB works with the European Investment Bank and the (European) Commission, and I think it will be very much up to these actors to act, rather than the ECB,” Draghi said.
He played down suggestions that the ECB was considering a program similar to the Bank of England’s Funding for Lending Scheme, noting that the ECB already allowed banks to use small business loans as collateral in its financing operations.
Germany Finance Minister Wolfgang Schaeuble, who was at the G7 meeting held 40 miles outside London, has signaled his opposition to the ECB buying buy asset-backed securities, telling his party it would amount to “covert state financing,” German magazine Spiegel reported on Saturday.
Editing by Mike Peacock