Bundesbank chief Jens Weidmann has warned that it is “wrong and dangerous” to rely on the European Central Bank as the only crisis manager.
by Telegraph staff and agencies
“Central banks in recent years have been pulled into the role of a crisis manager. Some think that central banks are the only able ones. I consider this thinking wrong and dangerous,” Mr Weidmann told Finnish newspaper Helsingin Sanomat in an interview
The Bundesbank president also repeated his warning that central bank financing could become addictive like a drug.
“The program can bring considerable risks to the monetary policy. Those risks now have to be limited and prevented,” he was quoted as saying, Mr Weidmann said that the greatest risk was that cheaper financing took away the incentive for fiscal reform.
“Monetary policy can only buy more time. It is like a painkiller which will not erase the reasons but can cause risks and side effects,” he said.