ML-Implode News - A Stress Test for Mario Draghi, Europe's Top Banker

"A central bank claiming that it will do â€˜whatever it takes' while not delivering with actions eventually loses its credibility," said Athanasios Orphanides, a former European Central Bank board member who is now an economics professor at the Massachusetts Institute of Technology. "It is difficult to escape the conclusion that the E.C.B. has not been operating in a manner that promotes fulfillment of its mandate."
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By some measures, Mr. Draghi, a 67-year-old native of Rome who earned a doctorate in economics from M.I.T., is at the peak of his powers. Wielding the moral authority he acquired after calming the markets and pulling the eurozone from the brink with his "whatever it takes" promise two and a half years ago, he has overseen a sweeping expansion of the European Central Bank's jurisdiction.

Not only does the central bank manage a currency used by 338 million people, in November it also began regulating eurozone banks, which together constitute the world's largest banking system.

Given his purview, Mr. Draghi arguably has as much or more power in Europe than national political leaders like Chancellor Angela Merkel of Germany and President FranÃ§ois Hollande of France. And because he is appointed by European political leaders, he does not need to win re-election. (Mr. Draghi, who rarely gives media interviews, declined to comment for this article.). Yet in its core task -- to keep inflation below, but close to, 2 percent -- the central bank has fallen short...

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A Stress Test for Mario Draghi, Europe's Top Banker