ECB’s Mersch warns of negative side-effects of ultra-loose policies

Yves Mersch: “This vigilance is particularly warranted in light of some signs that monetary policy is encouraging increased risk-taking”

The European Central Bank’s negative rates and asset purchases may contribute to higher risk-taking, high asset-price inflation and inequality, said Yves Mersch on January 27.

In a speech, the ECB’s executive board member stressed ultra-loose policies are contributing to higher owner-occupied housing costs. Such costs are not included in the institution’s measure of inflation, which could hamper efforts to explain the need for negative rates to the public; many people perceive inflation as way

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