German Central Banker Says QE Not Out of The Question

Bundesbank President Jens Weidmann said it was not ‘out of the question’ for the European Central Bank to buy bank assets to fight deflation, in a softening of the German central bank’s strict stance on the issue.

Quantitative easing (QE) is when a central bank buys loans or other assets from banks and would represent a radical departure for the ECB, which has so far, not least under pressure from Germany, refused to make such a move.

Weidmann, who is a member of the European Central Bank Governing Council told MNI in an interview published on Tuesday that the scope of the ECB’s conventional tools, such as changes to the interest rates, was limited.

“The unconventional measures under consideration are largely uncharted territory. This means that we need a discussion about their effectiveness and also about their costs and side-effects,” Weidmann said in the interview, conducted on Friday.

“This does not mean that a QE program is generally out of the question,” Weidmann said. “But we have to ensure that the prohibition of monetary financing is respected.”

via CNBC

Content is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Business Information & Services, Inc. or any of its affiliates, subsidiaries, officers or directors. If you would like to reproduce or redistribute any of the content found on MarketPulse, an award winning forex, commodities and global indices analysis and news site service produced by OANDA Business Information & Services, Inc., please access the RSS feed or contact us at info@marketpulse.com. Visit https://www.marketpulse.com/ to find out more about the beat of the global markets. © 2023 OANDA Business Information & Services Inc.