BBK Dombret: Low Interest Rates Can Only Be For Limited Time

Author: Market News International | Category: News

— Must Consider Bond Markets When Exiting Non-Standard Measures

FRANKFURT (MNI) – Policymakers can only keep interest rates low
for a limited period, Bundesbank board member Andreas Dombret said
Monday.

“A low interest rate regime can only be applied for a limited
period of time to stabilize a financial crisis since it otherwise
encourages excessive risk-taking,” Dombret said according to a press
release issued by the Bundesbank.

“When planning the exit from non-standard monetary policy measures,
due account needs to be taken of the associated risks for the bond
markets. This also means that such an exit places high demands on
effective communication,” Dombret also said.

The comments were made at a joint conference of the People’s Bank
of China and the Deutsche Bundesbank in Frankfurt. At the conference,
the two central banks “underscored the shared intention of the People’s
Bank of China and the Deutsche Bundesbank to strengthen their
cooperation in the area of financial stability,” the release said.

–Frankfurt newsroom, +49-69-720-142; jtreeck@marketnews.com

[TOPICS: M$$EC$,M$X$$$,M$$CR$,MGX$$$,M$G$$$]

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