ECB Governing Council member Klass Knot blast the stimulus package announced by the central bank yesterday. He said “this broad package of measures, in particular restarting the asset purchase program, is disproportionate to the present economic conditions, and there are sound reasons to doubt its effectiveness.” He added, “there are increasing signs of scarcity of low-risk assets, distorted pricing in financial markets and excessive risk-seeking behavior in the housing markets,”
Another Governing Council member Robert Holzmann also questioned that the comprehensive package shouldn’t come before the planned policy review. He pointed to inflation target and said “It may be that 2% at the moment is out of reach and 1.5% also signifies stable prices, almost stable prices. So there is no need to … use all the power you have in order to move up to 2% if the cost is too high.”
