Friday 23 February 2018

End QE now - Dutch central bank chief

'The ECB is inching closer to unwinding unprecedented stimulus.'
'The ECB is inching closer to unwinding unprecedented stimulus.'

Wout Vergauwen

The European Central Bank has to end its quantitative easing as soon as possible, according to ECB Governing Council member Klaas Knot, who said there's not a single reason to continue with the program.

The Irish Government has been among the big beneficiaries of QE, which has driven down borrowing costs for the State by flooding the bond market with cash.

"The program has done what could realistically be expected of it," Mr Knot, who also heads the Dutch Central Bank, said on Sunday.

The ECB is inching closer to unwinding unprecedented stimulus.

At their December meeting, officials held out the prospect of a change in policy language early in the year, and some governors have since expressed their favour for taking a first step in March.

While ECB President Mario Draghi said last Thursday that confidence in a sustained pickup in inflation has increased, patience and persistence are still warranted as progress so far remains muted.

"The program is fixed until September," Mr Knot said, with Mr Draghi's reasoning being that the central bank doesn't have to commit yet to what will happen after that month.

"We don't have to communicate yet that it will be over after September, but I think that's where we're headed." He said there is enough proof to make that clear.

The ECB plans to continue buying €30bn of assets a month until at least the end of September, and has reiterated that interest rates will stay low well beyond that. (Bloomberg)

Irish Independent

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