German Central Banker Warns About Risks to ECB Stimulus

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.

via CNBC

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza