Economics
ECB’s Wunsch, Weidmann Say New Rate Guidance Goes Too Far
- Belgian governor says central bank might need “escape clause”
- Comments by Wunsch, Weidmann and Villeroy show ECB divisions
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The European Central Bank’s new guidance on how long it’ll keep interest rates at record lows is too far-reaching because it doesn’t sufficiently account for trade-offs that officials may have to consider, according to Belgian policy maker Pierre Wunsch.
“My concern is that we can’t credibly commit, which is the reason for my dissent,” Wunsch said in an interview. “I don’t know whether it will be proportionate to still have negative rates in three, four, five or seven years.”