The European Central Bank is unanimous that accommodative monetary policy is appropriate for the currency bloc, one of the bank’s more hawkish members said in a speech Thursday.
Speaking at an event marking the 60th anniversary of the Bundesbank, Jens Weidmann said that while expansive monetary policy is appropriate, how this is applied can spark disagreements. He repeated his opposition to the purchases of government bonds. “I would have rather forsaken the use of this instrument,” he said.
Mr. Weidmann’s speech dwelt to a considerable extent on the history of his institution and on broad themes with little discussion about current monetary policy.
The comments come as the ECB ponders when to begin to unwind its very generous monetary policy. The ECB is currently buying €60 billion of bonds per month. It is due to continue doing this until the end of the year and markets are closely eyeing central bankers’ remarks for clues about what the central bank will do beyond the end of the year.
On Tuesday, ECB President Mario Draghi gave a speech, which markets interpreted as a slow turn toward tapering, or a gradual reduction of purchases. Most economists expect the central bank to reduce purchases gradually next year. The euro gained in value and bond prices fell on the back of Mr. Draghi’s comments. However on the following day, the ECB’s Vice President Vitor Constancio said in an interview with CNBC that Mr. Draghi’s speech wasn’t any different than two other recent major policy comments he had given.
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