New Austrian National Bank Governor and ECB Governing Council member Robert Holzmann set out his hawkish line over the weekend. He told broadcaster ORF that He’d “probably express more criticism toward proposals for future deepening of the monetary footprint.” He noted that “Cheap money has its charms but also its limits, especially when it lasts for a long time.”
Holzmann also said the “probability of further effects” of monetary stimulus was “very slightly”. On the other hand, the short- or long-term risks associated “have risen to a great extent because low rates per se carry the risk of misallocation of resources and misallocation of price discovery.
He added: “You see this in real estate prices, in gold prices and in erratic stock prices. The long-term effects could be very negative for Europe and the world.”
