‘Monetary policy accommodation is now reaching its limits’ – ECB’s Knot

FXStreet (Mumbai) - Speaking at a conference at the Organisation for Economic Cooperation and Development (OECD) in Paris, the European Central Bank's (ECB) Governing Council member Klaas Knot said on Wednesday that the bank’s monetary policy easing is reaching its limits as it went as far as possible without running the risk of creating financial market bubbles.

Key Quotes:

"Monetary policy accommodation is now reaching its limits and if it is maintained for a significant period of time it also comes with the risk of certain negative side-effects such as new financial imbalances,"

Speaking further, he said it was still too early to declare the success of the bank's unconventional monetary policy measures, albeit "macro risks have receded."

"Credit cycle has turned positive and [we] would like to see more,"

On Greece, he noted, "It's in the hands of the politicians now, we follow with great interest what is happening."

"We make sure that we keep the Greek banks functioning, which is our role."