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Interview with Vítor Constâncio, Vice-President of the ECB, conducted by Marcel de Boer and Saskia Jonker on 29 April 2015 and published in Het Financieele Dagblad.
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The ECB’s controversial purchase programme will not be halted prematurely, even if the economy in Europe is picking up more rapidly than expected, said Vítor Constâncio, Vice-President of the European Central Bank (ECB), in an interview with Het Financieele Dagblad.
“The programme is working well. Why should we think of discontinuing it when inflation is negative and inflation expectations are nowhere near our medium-term goal of close to 2%?” So that option is not even on the table for the Executive Board of the ECB. “We only started it a few months ago. It would be very strange if we were already talking about stopping.”
Critics argue that the ECB is creating bubbles in asset markets because all markets are being driven up by the large-scale purchase programme (known as quantitative easing). But the Portugese central banker is not afraid of that. “There is no generalised asset overvaluations in the euro area.” He acknowledges that quantitative easing is making investors take more risks because that is more profitable. “That is partly what we want to achieve through our programme, this so-called portfolio shift. The only danger is that the “search for yield” might get out of hand. We need to keep a close eye on that. It is the job of macroprudential policy, not of monetary policy, to avoid the build-up of bubbles”.