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There is little evidence that the monetary policy is currently doing harm to banks' profitability, European Central Bank President Mario Draghi said Friday.
"If there are any negative effects of low rates on net interest income in the future, they should be largely offset by the positive effects of monetary stimulus on the other main components of profitability, such as the quality of loans and therefore on loan-loss provisions," he said in a speech in Frankfurt.
Further, he said the currency bloc is in the midst of a solid economic expansion.
"From the ECB's perspective, we have increasing confidence that the recovery is robust and that this momentum will continue going forward," he said.
Ensuring price stability is a precondition for the economy to be able to grow along a balanced path that can be sustained in the long run, Draghi said. "This is the guiding principle of all our monetary policy decisions."
Draghi said quantitative easing could be extended beyond September 2018, if necessary. An ample degree of monetary stimulus remains necessary for underlying inflation pressures to build up and support inflation over the medium term, he noted.
