THE Head of the Europe's central bank is running out of tools to deal with the bloc's economic woes, an expert warned ahead of an appearance by Mario Draghi later today.
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Investors hope the bank chief will be able to calm rising fears over the eurozone's financial stability, following Britain's vote to leave the European Union (EU).
The economic picture for the bloc has darkened since the referendum outcome, which has trigged panic over Italy's banks, which hold around £270billion of bad loans on their books.
In a bid to smooth the cracks, the European Central Bank (ECB) is now expected to take monetary action in the coming months.
But Mr Draghi is running out of options, after already going to extreme lengths to boost the economy in recent years.
The economic picture for the bloc has darkened since the referendum outcome, which has trigged panic over Italy's banks, which hold around £270billion of bad loans on their books.
In a bid to smooth the cracks, the European Central Bank (ECB) is now expected to take monetary action in the coming months.
But Mr Draghi is running out of options, after already going to extreme lengths to boost the economy in recent years.
Now Mr Draghi will need to pull a rabbit out of the hat to persuade markets that Brexit will not derail the eurozone economy.
BNP Paribas economist Luigi Speranza said. "The burden of responding to the Brexit shock will remain with the ECB, which is all too aware that it has fewer and fewer tools with which to respond."
Following the Bank of England's wait and see approach towards the economy following the vote to leave, the ECB is likely to adopt a similar attitude today.
But the chief is expected to hint that he could in effect print more money for the bloc or cut interest rates even lower come September.
Florian Hense, an economist at Berenberg, said:"Draghi will likely nurse market concerns about the ECB's monetary policy by using a dovish tone and possibly pointing to further action later this year.
"For the ECB it is important to keep its options open."
http://www.express.co.uk/finance/city/691773/European-Central-Bank-tools-economy-italy-bank-woes
