The combined effect was “a subtle shot across the bow of those who seek deregulation,” said Michael Gapen, chief US economist at Barclays Capital in New York.
The complementary speeches come at what may be the tail end of Yellen’s tenure at the Fed’s helm. President Donald Trump is not expected to reappoint her when her leadership term expires in February, according to economists surveyed by Bloomberg.
Gapen said that by delivering overlapping messages, Yellen and Draghi could help amplify their points, but “in practice that’s not the agenda the Trump administration is likely to seek.”
In a talk aimed broadly at defending the merits of globalisation, Draghi said it’s crucial to make sure open policies on trade and global finance should be safeguarded with regulations designed to make globalisation fair, safe and equitable.
“We have only recently witnessed the dangers of financial openness combined with insufficient regulation,” Draghi said, referring to the global financial crisis of 2008-09.
Any reversal of the regulatory response to that crisis, he added, “would call into question whether the lessons of the crisis have indeed been learnt — and thus whether financial integration can still be considered safe.”
That point was all the more important given that central banks are continuing to provide stimulus to their economies. “With monetary policy globally very expansionary, regulators should be wary of rekindling the incentives that led to the crisis,” Draghi said.