Interviewed by the Neue Zuercher Zeitung, Peter Praet defended the bank's stimulus programmers, including quantitative easing, saying they had helped avoid a damaging financial panic.
As turbulence in emerging markets intensifies, he said the
ECB remains ready to modify or expand the program, now seen as buying more than one trillion euros ($1.13 trillion) in bonds to counter a potentially deflationary spiral.
"That's premature, at this time, but the risks in the world economy have increased significantly. We have had to correct our economic forecasts downward and we want to be ready to act, should the conditions demand it."
Earlier this month, the bank cut its growth and inflation forecasts, warning of possible further trouble from China. For the first time,
ECB President Mario Draghi said explicitly the bond-buying program may be extended.
Despite risks posed by an expansive monetary policy, Praet said the
ECB is convinced it acted appropriately, in part because its sees no "speculation bubbles" on the horizon. "The risks to financial stability are currently limited," said Praet, who from 2000 to 2011 was executive director of the National Bank of Belgium.
Praet said the ECB's economic forecasts from earlier in 2015 weren't too optimistic. "The adjustment downward in September wasn't big and was mostly related to the correction in emerging markets," he said. "The economic recovery in the euro-zone is intact."
Praet contended the European Union would be far stronger and better equipped to manage crises by 2020 as countries tackle structural reforms and the continents' banks become fully integrated.
"We're seeing encouraging signs in the euro zone and especially in countries like Spain and Ireland, but also in Portugal," he said. "Italy began its reforms too late, but is now on the right path."
© ECB - European Central Bank
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