This article describes why Mario Draghi (a.k.a. "super mario") will be the most important person in economics in 2012. Draghi just recently took over the position of chairman of the European Central Bank. As the U.S. economy is finally beginning to recover from the recession there is a fear that a collapse of the European market could "derail" that recovery. As chairman of the European Central Bank, Draghi will play a large roll in making sure that the European market does not collapse. There is a lot of confidence in Draghi as he has already "defused the funding crisis" in Europe. The banks took out more than 500 billion euros in loans and now they have more liquidity than they know what to do with.
In this current situation Draghi and his colleagues on the ECB board would like to implement a new bailout plan called the European Stability Mechanism, which politicians will control. Unfortunately the maximum amount for loans is 500 billion euros which is not big enough. The question now is whether or not Draghi can successfully reassure the European market and help ensure that the U.S economy does not get derailed from its recovery.
http://finance.fortune.cnn.com/2012/01/24/mario-draghi-ecb/
Jaime Vavrek
3 comments:
I believe that there can be nothing but confidence in Mario given his past success. Although my primary fear would be whether he has the means and support available to him to be able to pull off a miracle
I believe the European crisis required not just the power and resource of the central bank, but also an agreement and a restructure in politic from all the countries in Europe.
I agree with An Dao, and would say that Europe right now faces a crossroad. To pull itself out of the crisis, it either needs to fully commit to furthering integration of its fiscal system as another step on the road to federalization, or it needs to abandon the whole approach. The current approach only delays the real issues facing them, and sooner or later a decision will need to be made.
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