UBS Chief Weber Sees ECB Announcing a Taper Around September

  • Bank expected to have stable balance sheet by mid-2018: Weber
  • Central bank officials debate whether to raise interest rates

UBS' Weber Sees ECB Announcing Taper in September

UBS Group AG Chairman Axel Weber said he expects the European Central Bank to move toward tapering its quantitative easing program around September.

The comments by the former Bundesbank president come as ECB President Mario Draghi is under pressure to map out a path toward the end of the central bank’s massive stimulus. As the euro-area economy has picked up in recent months, ECB officials have been publicly debating when they might start to wind down their asset purchases and raise interest rates.

The ECB has to "scale back," Weber said Tuesday in a Bloomberg Television interview in Tokyo. "My expectation is that in June they will remove some of their easing biases that they still have in their language, and around September they will probably announce that they are going to taper their purchase program, which they will do over six to nine months in 2018," he said.

The ECB said last month intends to maintain its bond-buying at 60 billion euros ($66 billion) a month until at least the end of this year and will only raise rates well after it ends. 

The central bank will soon be able to adopt a more optimistic tone on the euro-area economy -- a possible first step in winding down stimulus -- Executive Board member Yves Mersch said in a speech in Tokyo on Monday.

"Come mid next year, we’ll probably have the ECB with a stable balance sheet and we will talk about interest rate movements after that," Weber said. "The ECB is clearly on the path to normalization yet they are following the Fed with some delay. Like the Fed, they are data driven, so if anything were to go wrong in the economy they might change that course."

In China, Weber said the Zurich-based lender aims to be the top foreign bank and reiterated that it remains committed to doubling its employee headcount serving the second-largest economy over five years.

"We have all the licenses, we have a wholly owned subsidiary, and we work with Chinese counterparties," Weber said. "We want to help expose Chinese investors to global assets so we bring the global asset base to China with our investment bank, asset management and wealth management, and we help to give China exposure to global investors who are seeking that through Hong Kong-Shanghai stock connect or bond connect in the future."

(A previous version of this story corrected Draghi’s title to president.)

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(Updates to add China comments in last two paragraphs.)
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