VIENNA (MNI) – The European Central Bank will discuss unwinding
non-conventional liquidity measures before considering raising interest
rates, ECB Governing Council member Ewald Nowotny said Friday.
“It is quite obvious that the interest rates as they are now are
not a longer-term equilibrium, but in the process of an exit policy this
is to be discussed at a later stage of the sequence,” Nowotny told
reporters on the sidelines of a labor union conference.
“It is quite obvious that the first thing to discuss is with
regards to specific non-conventional measures, since they are not part
of the general instruments of the ECB,” he added.
Although he had previously voiced his support for discussing
further exit measures during December’s monetary policy meeting, Nowotny
failed to confirm that he would push for further exit steps in the first
quarter.
“We never precommit. Its quite clear that in the long-term we want
to exit from the stance as we have it now, but we never precommit with
regards to specific dates,” he said.
Nowotny confirmed that the central bank’s latest inflation
forecasts have upside risks but said that these were not material.
Asked whether the ECB should prevent banks from refinancing only
via the central bank, Nowotny said: “There is an obvious problem of so-
called addicted banks. This is a problem that has to be solved primarily
by the governments involved.”
A recent newspaper report said that ECB Governing Council member
Mario Draghi had raised the option of using regulatory tools to prevent
banks from relying exclusively on the ECB.
–Frankfurt newsroom +49 69 72 01 42; Email: jtreeck@marketnews.com
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