Draghi says monetary policy has been destabilising

After expressing "sadness" over Brexit...

ECB president Mario Draghi has blamed the aggressive monetary policy of central banks for causing "destabilising spillovers" for the global economy – "especially when business cycles have been less aligned."

Speaking at the ECB's annual forum in Sintra, Portugal, this morning, Draghi focused on the particularly forceful approach taken rather than the policies themselves:

"This is not so much a result of the measures central banks have employed, but rather of the intensity with which they have had to be used."

Big exchange rate swings and reversals in the capital flow in emerging markets were used as some examples of the negative impact that massive interest rate cuts and mass bond-buying schemes have had.

Draghi once again called for greater co-operation and unity when it comes to implementing such economic manoeuvres.

He said:

"We may not need formal coordination of policies. But we can benefit from alignment of policies."

Warning against countries attempting to weaken their own currency, he said it would be a "lose-lose for the global economy, since they lead only to greater market volatility, to which other central banks are then forced to react to defend their domestic mandates."

The ECB president did not address Brexit today, but commented in Sintra yesterday:

"Sadness is the best word when witnessing changes of this magnitude."