Asmussen Says Any QE Discussions at ECB Not Policy Relevant

European Central Bank Executive Board member Joerg Asmussen played down a report in Sueddeutsche Zeitung that said ECB officials are considering a policy of quantitative easing in the euro region.

“I can’t rule out that inside a large organization, someone is thinking about something, but that’s not policy-relevant,” Asmussen said in an e-mail to Bloomberg News.

Asmussen said that ECB President Mario Draghi’s statement that the central bank is looking “360 degrees” at new policy options only refers to fixing the transmission mechanism between monetary policy and the real economy. The Sueddeutsche article, published today, said ECB staff are considering a new bond-buying plan that would encompass the debt of all 17 euro-area nations.

“The 360-degree considerations by the ECB are focused on the question of how to support the credit supply to the real economy, in particular SMEs, and on nothing else,” he said.

Draghi on June 6 listed a menu of further measures that the ECB may deploy to aid the euro-area economy, now in its longest-ever recession, including further long-term loans, a negative deposit rate and stimulating the market for asset-backed securities. At the same time, Draghi said on June 26 that given the ECB’s legal set-up, “it would be difficult” to deploy quantitative easing in the way the U.S. Federal Reserve does.

“Given the current economic data and our forecasts, our accommodative monetary policy is appropriate,” he said. “An exit from this policy is too early. If you compare it with driving a car: The speed is exactly right. One shouldn’t step on the brakes, neither the accelerator. Suggestions that say otherwise aren’t correct.”

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