Draghi defends QE warning Central Banks over monetary policy

President Mario Draghi gave little indication about the next steps for monetary policy in the euro zone during a speech on Wednesday ahead of a key meeting between central bankers. The European Central Bank chief seemed to have learned from his own mistakes by avoiding commenting on how and when he might bring monetary stimulus to an end.

Speaking at a conference in Lindau, Germany, Draghi praised economists' research and said that adjustments to monetary policy are "never easy." However, he made no reference to how the bank might adjust its own policy to the improving economic data across the euro zone, a highly debated issue among market participants.

Emphasizing the need for rigorous research, Draghi said central banks need to carefully weigh their policy steps, giving up their defense of obsolete approaches while acknowledging gaps in their knowledge of how new policies work.

Draghi defended unconventional monetary policy, though, arguing that it has succeeded in the face of extreme shocks and proved that central banks remain potent even when interest rates bottom out.

"Policy actions undertaken in the last 10 years in monetary policy and in regulation and supervision have made the world more resilient. But we should continue preparing for new challenges," Draghi said.

"A large body of empirical research has substantiated the success of these policies in supporting the economy and inflation, both in the euro area and in the United States," the ECB head added.

Back in June, Draghi rattled markets with a speech at a banking conference in Sintra, Portugal. The ECB President is due to speak at the Jackson Hole meeting this Friday, where other central bankers and policy experts will be debating monetary policy.