23.08.201410:22:00UTC+00ECB Chief Signals More Monetary Stimulus To Support Recovery

European Central Bank President Mario Draghi said the bank is willing to take more actions to anchor inflation expectations and stimulate demand.

At the Federal Reserve Bank of Kansas City's annual conference Jackson Hole, Wyoming, Draghi on Friday said he is confident that the package of measures announced in June will indeed provide the intended boost to demand.

Draghi said the bank stands ready to adjust our policy stance further.

He noted that the recovery in the euro area remains uniformly weak. The uncertainty over the strength of the recovery is weighing on business investment and slowing the rate at which workers are being rehired, Draghi said.

"The risks of "doing too little" - i.e. that cyclical unemployment becomes structural - outweigh those of "doing too much," Draghi added.

He said the preparations for outright purchases in asset-backed security markets is fast moving forward and it should contribute to further credit easing.

Turning to fiscal policy, he said the existing flexibility within the rules could be used to better address the weak recovery and to make room for the cost of needed structural reforms.

"It would be helpful for the overall stance of policy if fiscal policy could play a greater role alongside monetary policy, and I believe there is scope for this, while taking into account our specific initial conditions and legal constraints," the central banker said.

He suggested that it may be useful to have a discussion on the overall fiscal stance of the euro area that could help to develop a more growth-friendly overall fiscal stance.