Bonnici Say ECB Looking ‘Especially’ at Non-Standard Measures

The European Central Bank is looking “especially” at non-standard measures to help boost economic growth, Governing Council member Josef Bonnici said.

“We do look at all possible options, especially with regard to non-standard measures,” Bonnici, who heads Malta’s central bank, said in an interview today in Valletta, the island nation’s capital. “There is considerable heterogeneity in the euro zone and therefore there must be a wide array of policies that are considered from time to time.”

ECB President Mario Draghi said last week that the central bank is considering using both standard and non-standard policy tools to stimulate the economy, which is mired in recession amid the sovereign debt crisis. Bonnici said that while an interest-rate cut is under consideration, such a move may have only a small impact.

“Interest-rate changes are part of the standard policy tools that the ECB has available, so it is quite natural that it is considered from time to time,” he said. “However, rates are already very low, so the marginal gain may be small.”

The ECB’s benchmark rate is at a record low of 0.75 percent and its deposit rate is at zero.

Bonnici said Malta’s banking system is “sound and robust with high solvency, profitability and liquidity,” and there are “no signs of any speculative activity.”

“Malta’s economic fundamentals also remain strong on the back of positive performance throughout the past years, notwithstanding a delicate external economic environment,” he said.