Nowotny Says S&P Favors Fed’s Bond Buying Over ECB’s Policy

European Central Bank Governing Council member Ewald Nowotny said Standard & Poor’s downgrades of euro members was based on the ratings company’s favoring the Federal Reserve’s policy of buying government bonds over the ECB’s “restrictive” policy.

S&P has “general doubts regarding our strategy of combining consolidation measures with the very restrictive policy of the ECB,” Nowotny said in a panel discussion broadcast live on Austrian state television yesterday. “Their model is the American or the English one, where the central bank itself massively buys bonds,” he said, adding that “this is a fundamental political discussion, which one has to lead.”