Weber Says ECB Should Phase Out Bond Purchases ‘Now’

Discussion in 'Economics' started by ASusilovic, Oct 12, 2010.

  1. Oct. 12 (Bloomberg) -- European Central Bank Governing Council member Axel Weber said the ECB should stop its bond- purchase program and signaled that it’s time for officials to show how they will withdraw other emergency measures.

    “As the risks associated with the Securities Markets Program outweigh its benefits, these securities purchases should now be phased out permanently,” Weber said, according to the text of a speech delivered in New York today.

    “As regards the two dimensions of exit consisting of phasing-out non-standard liquidity measures and normalizing our clearly expansionary monetary policy, there are risks both in exiting too early and in exiting too late,” Weber said. “I believe the latter are greater than the former.”

    Weber’s comments are the strongest so far from any of the ECB’s 22-member Governing Council advocating a withdrawal of emergency measures. They come as governments and banks in euro nations such as Ireland and Portugal struggle to convince investors about their financial health and as other central banks around the world signal their willingness to add more stimulus to their economies.

    The remarks follow ECB President Jean-Claude Trichet’s last policy statement just five days ago, in which he declined to comment on the timing of the ECB’s exit strategy.