VIENNA (MNI) – Current risks premiums on sovereign debt might be
exaggerated, European Central Bank Governing Council member Ewald
Nowotny said on Friday.
“We have quite substantial risk premiums now in our markets. You
could say that even to a certain extent they may be overblown now,”
Nowotny, who heads the Austrian National Bank, said.
Addressing changes in Europe’s financial architecture aimed at
averting a new crisis, Nowotny welcomed the introduction of the European
Systemic Risk Board, saying that it can play a key role in ensuring
financial stability and in countering the potential build-up of bubbles.
“I do not think that this is something you can address by interest
rates,” he asserted. “I would be a bit hesitant to extend the role of
the ECB to fields where we might get into conflicts with our [price
stability] goal.”
–Frankfurt newsroom, +49-69-720-142; jtreeck@marketnews.com
[TOPICS: M$$EC$,M$X$$$,MGX$$$,M$$CR$]
