Supplying unlimited amounts of liquidity at interest rates close to zero has “unintended counterproductive consequences,” former European Central Bank President Jean-Claude Trichet warned on Saturday.
“It’s true that new bubbles are necessarily created when you deliver unlimited supply of liquidity at zero rates,” Trichet told CNBC in an interview at the Ambrosetti Forum in Italy.
The European Central Bank (ECB) surprised investors and markets on Thursday by cutting interest rates to record lows and announcing a bond-buying program.
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