QE should stabilise rather than stimulate – ECB’s Schnabel
Asset purchases have become conventional, but central banks should exercise caution
Central banks’ asset purchases are powerful during times of crisis, but outside of these periods, the costs can outweigh the benefits, the European Central Bank’s (ECB) Isabel Schnabel said at a conference in Tokyo on May 28.
The ECB executive board member noted that in Europe, asset purchases were initially used to revive the covered bond market. Later, the ECB turned to purchasing securities to address severe stress in certain market segments, which was hampering monetary policy transmission.
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