Global financial crisis 'actually started before Lehman,' ECB's Draghi says

  • Speaking at a post-policy meeting press conference in Frankfurt, Draghi told reporters: "For us, the crisis actually started before Lehman. The first serious signs... date back to September 2007."
  • His comments come 10 years after Lehman Brothers filed for bankruptcy — a moment many external observers identify as pivotal in the unfolding of the global financial crisis.
  • Draghi announced small cuts had been made to the bank's growth forecasts for this year and next on Thursday.
  • The central bank now expects growth of 2 percent this year and 1.8 percent in 2019 — slightly lower than previous projections of 2.1 percent and 1.9 percent.

The first signs of an impending global financial crisis were clear long before Lehamn Brothers collapsed, European Central Bank (ECB) President Mario Draghi said on Thursday.

Speaking at a post-policy meeting press conference in Frankfurt, Draghi told reporters: "For us, the crisis actually started before Lehman. The first serious signs of an impending crisis actually date back to September 2007."

"What I remember of that incident was the extraordinary effort of international cooperation at world level. In other words, even before Lehman it was quite clear that the financial crisis was coming. And it would have unprecedented proportions and was worldwide," he added.

Draghi's comments come 10 years after Lehman Brothers filed for bankruptcy — a moment many external observers identify as pivotal in the unfolding of the global financial crisis.

The failure of Lehman Brothers in 2008 roiled global markets. It was the fourth-largest U.S. investment bank when it collapsed in September 2008, prompting an erosion of nearly $10 trillion in market capitalization in global equities in the following month.

Growth, inflation forecasts

Draghi was speaking in Frankfurt shortly after the ECB announced interest rates would remain unchanged in September.

The ECB chief reaffirmed his confidence in the regional economy, saying it would most likely be robust enough to absorb spare capacity and generate inflation.

However, he did warn global risks had gained more "prominence" in recent months, amid rising protectionism and financial market volatility.

Draghi also said small cuts had been made to the bank's growth forecasts for this year and next. The central bank now expects growth of 2 percent this year and 1.8 percent in 2019 — slightly lower than previous projections of 2.1 percent and 1.9 percent.

ECB policymakers maintained the bank's forecast of annual inflation at 1.7 percent through to 2020, with Draghi saying this was consistent with the ECB's target of near 2 percent.

Thursday's decision sees the ECB's deposit rate — currently its primary interest rate tool — remain unchanged at -0.4 percent, while the main refinancing rate was held steady at 0 percent.

Holger Schmieding, chief economist at Berenberg Bank, told CNBC on Thursday that there was "no surprise" with the bank's decision.

He added he now expects the bank to raise rates in two steps late next year, in September and December 2019. This would bring the refinancing rate