The head of the European Central Bank underlined on Thursday the bank’s readiness to extend money printing, warning that a key measure of economic health — price inflation — was flagging.

In remarks to European Union lawmakers, Mario Draghi also defended private meetings between policy setters and banks and hedge funds, such as executive board member Benoit Coeure’s meeting with a French bank hours before the ECB cut rates.

“Signs of a sustained turnaround in core inflation have somewhat weakened,” Draghi told the European Parliament’s economics committee, addressing a barometer of economic health that could influence the ECB’s massive money printing scheme.

His comments, pointing to the risks of a spillover to Europe from a slowdown in China or other emerging markets, amplify a chorus of similar warnings indicating further possible action as soon as Dec. 3, when ECB policymakers next gather.

“We have always said that our purchases would run beyond end-September 2016 in case we do not see a sustained adjustment in the path of inflation,” Draghi added, calling its quantitative easing scheme “powerful and flexible”.

“Other instruments”, he said, “could also be activated”. People familiar with the matter said this week that the ECB is examining whether to buy municipal bonds of cities such as Paris or regions like Bavaria.

The bank launched the programme, under which it buys 60 billion euros a month of mostly government bonds, in March. By next September, when purchases are due to end, the ECB will have spent more than 1 trillion euros to lift inflation and growth.

The scheme also allows the bank to buy asset-backed securities and covered bonds, but as with European muni bonds, those markets are relatively small.

Facing an unusually high number of critical questions from lawmakers compared to similar earlier hearings, including from one parliamentarian who accused the ECB of being an ‘arsonist’ during Ireland‘s financial crisis, Draghi defended the transparency of the central bank.

He indicated the ECB may change its involvement with the International Monetary Fund and European Commission that oversaw the bailout programmes of countries such asGreece or Ireland.

Draghi also said the ECB would publish the diaries of members of the ECB’s executive board, which forms the nucleus of policy, after a recent request for that information revealed hedge funds and banks had regular contact with policy setters.

“We have had and still have a clear rule — we do not discuss market-sensitive information in non-public meetings,” he said. “For our monetary policy to be effective, however, it is important to meet market participants and to also hear their views.”

Source: Reuters