Bundesbank’s Weidmann: ECB Could Face “Legal Limits”

The European Central Bank could encounter “legal limits” if it pursued additional steps to combat low inflation, the president of Germany’s Bundesbank said on Monday, calling for a focus on growth rather than any government bond buying.

“Instead of focusing on the purchasing program, we should focus on how you find growth,” Jens Weidmann told an audience in Madrid, when asked about the possibility of the ECB buying government bonds, a step known as quantitative easing.

He warned that it would be difficult to pursue such steps to tackle low inflation.  “Of course there are other measures which are more difficult, because they are untested, because they are less clear … and of course they hit the legal limits of what you can do,” said Weidmann, who sits on the ECB’s Governing Council.

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