Central Banks

ECB’s Schnabel Says QE Must Be Used Carefully Outside of Crises

Executive Board member delivers speech on QE in Tokyo
Major central banks are unwinding asset-purchase programs

WATCH: Schnabel said the ECB should use QE primarily in times of crisis. Meanwhile, Francois Villeroy de Galhau said the ECB shouldn’t rule out cutting rates at both its June and July meetings. Bloomberg’s Mary Nicola reports.Source: Bloomberg

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By Mark Schroers and Alexander Weber

May 28, 2024 at 5:20 AM UTC

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The European Central Bank should use quantitative-easing programs primarily in times of crisis as their costs might be more pronounced than other tools in its repertoire, according to Executive Board member Isabel Schnabel.

“Asset purchases can be a powerful tool when financial markets are in turmoil,” she said in a speech in Tokyo on Tuesday. “Outside these periods, however, central banks need to carefully assess whether the benefits of asset purchases outweigh the costs.”