Rate cuts alone can't combat crunch: Draghi

Monetary policy cannot be the only, or even the main tool, for reflating the economy and the financial system, said Mario Draghi, the governor of the Bank of Italy.

"Fiscal policy will have a key role to play, in its various configurations," said Draghi. "But equally important would be to recreate an environment where banks during this current transitional period were both able and willing to use their [capital] buffers to lend, and capital markets were able and willing to fulfil their functions

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