Lagarde signals plan to stick to Draghi's ECB expansionary path

The ECB's next chief Christine Lagarde signaled Thursday that she would stick with Mario Draghi's controversial expansionary monetary policy that has propped up the eurozone economy amid growing risks to growth.

In a written reply to queries from the European Parliament, Lagarde underlined that inflation has remained stubbornly low in the bloc while growth was stalling.

"It is therefore clear that monetary policy needs to remain highly accommodative for the foreseeable future. The ECB has a broad tool kit at its disposal and must stand ready to act," wrote Lagarde.

"While I do not believe that the ECB has hit the effective lower bound on policy rates, it is clear that low rates have implications for the banking sector and financial stability more generally," she noted.

Over his eight years in office, the ECB's incumbent chief Draghi has brought interest rates to record lows and unleashed billions of euros in quantitative easing to ward off the threat of deflation and drum up ...