Stark Sees Liquidity Inflation Risk, Handelsblatt Says
(Corrects name in headline.)
Juergen Stark, the German who quit as the European Central Bank’s chief economist last year, said liquidity the ECB has injected into the financial system boosts the risk of inflation, Handelsblatt reported.
The running time of the central bank’s three-year loans to banks to fight the euro-area debt crisis is long and makes it more difficult to design an exit strategy to reduce liquidity, Stark, a former ECB Executive Board member, told the Dusseldorf- based newspaper in an interview published today.
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