Update: ECB Draghi: CBanks Not Powerless Even at Lower Bound

--Adds Context in Final Paragraph

By Jack Duffy

     PARIS (MNI) - Quantitative easing and other non-conventional policy tools

have proved that central bankers are not powerless, even when interest rates

have reached their so-called lower bound, European Central Bank President Mario

Draghi said Wednesday.

     In a speech in Lindau, Germany focused largely on academic research, Draghi

said "large-scale asset purchases can...increase investors' risk-bearing

capacity, leading to a portfolio rebalancing towards risky assets and to

strengthened lending activity for banks."

     Draghi said that "provided they are willing to explore non-standard policy

avenues, [central banks] can continue pursuing their price stability mandates

even in the most adverse circumstances."

     Draghi's speech did not refer at all to current monetary policy or current

Eurozone economic conditions. He is next scheduled to speak at the Federal

Reserve's Economic Symposium in Jackson Hole, Wyoming on Friday at 21:00 CET.

--MNI Paris Bureau; tel: +33 1-42-71-55-41; email: jack.duffy@marketnews.com

[TOPICS: M$X$$$,M$$EC$]