FRANKFURT (MNI) – European Central Bank Executive Board member
Juergen Stark reaffirmed on Tuesday that the phasing out of
liquidity-support measures would continue next year, stressing that the
exit strategy would be “guided by gradualism and steadiness”.
The situation in money and financial markets has improved
significantly in recent months and the ECB’s non-standard measures have
proven effective overall, Stark said in remarks prepared for delivery at
a conference here.
“However, these measures represent strong medicine,” Stark said.
“We therefore need to constantly assess whether or not it is still
warranted.”
“The phasing out of our liquidity-support measures will continue
after the end of the current quarter,” Stark said. “Our decisions will
be guided by gradualism and steadiness and will be consistent with
improvements in financial market conditions and real activity.”
Stark cautioned that the crisis is not yet over and that the
economic growth experienced before the crisis are unlikely to be reached
again.
“We seem to be in the process of ‘normalisation’ in the sense that
we move to a more stable situation,” Stark said. “However, the crisis is
not over yet and the situation in some financial market segments remains
challenging.”
Stark also reiterated the ECB’s prime mandate of delivering
medium-term price stability. “Mandates with several goals may overburden
monetary policy,” he warned.
— Frankfurt bureau; +49-69-720 142; email: frankfurt@marketnews.com —
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