ECB policymaker and President of the German Bundesbank Jens Weidmann warned on Thursday that the stimulus policies being delivered by the ECB could – over time – lead to financial risks such as exorbitant gains on real estate markets.
In a speech at a conference hosted by Germany’s conservatives in Berlin, he said that low interest rates in the region are easing the pressure on euro zone governments to push forward with reforms, according to Reuters. He added that the ECB should therefore not leave policy loose for too long.
The ECB left monetary policy unchanged at Thursday’s meeting after it announced a raft of measures in June to combat the euro zone’s growth-sapping disinflation and spur its recovery. ECB President Mario Draghi sounded a dovish note, giving further details on the bank’s new long-term lending program for banks and also announced that the frequency of the bank’s meetings would change to a six-week cycle from January 2015.
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