FRANKFURT (MNI) – The European Central Bank must change its
monetary policy stance as risks to price stability move to the upside,
Executive Board member Juergen Stark said Wednesday.
“At the height of the financial crisis, the ECB lowered interest
rates aggressively in the face of downside risks to price stability,”
the central banker explained in an opinion piece posted on the website
of the Financial Times.
“To the extent that these risks tilt to the upside, the ECB needs
to reverse its stance,” he added.
“If it failed to respond symmetrically to the evolving
circumstances, investors would soon demand a higher premium to
compensate for the increased inflation risk,” he said.
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