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QE Should Only Be Emergency Tool, ECB Board Member Says

European Central Bank Executive Board member Sabine Lautenschlaeger said policy makers should only consider radical programs such as quantitative easing if the euro area is on the verge of deflation.

“While such measures are in general part of the toolkit, the prerequisites for such a monetary-policy measure must be particularly high as the side effects are especially significant,” Lautenschlaeger said in Hamburg yesterday. “Only in a real emergency situation, for example in the case of imminent deflation, could in my view such an instrument be considered. Those risks are neither visible, nor do we expect them.”