FRANKFURT (Reuters) - European Central Bank Executive Board member Peter Praet warned on Thursday against reading too much into the low take-up of the first round of four-year ECB loans, stressing that they are part of a broader policy package.
The first round of the ECB's new four-year loans, or TLTROs, saw disappointing take-up by banks on Thursday, which raised speculation in the market the central bank may have to resort to more extreme measures to get the euro zone economy going again.
But Praet, who is in charge of the ECB's economics portfolio, said that expectations for the first round had always been lower than for the second offering in December and referred to the ECB's other stimulus steps.
"Markets have understood that the June and September measures should be seen as a combination aiming at addressing credit impairment," Praet told Reuters in an interview.
"These measures can only be assessed once they have been fully implemented."
The launch of the TLTROs, a central plank of the ECB's efforts to coax reluctant banks to lend, saw the euro zone's central bank hand out 82.6 billion euros of 400 billion euros ($515.16 billion) on offer to 255 banks.
A large part went to Italian and Spanish banks.
The ECB will detail its plans to buy asset-backed securities and covered bonds in October, on top of the four-year loans. ECB President Mario Draghi said earlier this month that these measures combined should bring the ECB balance sheet close to levels seen in early 2012.
The ECB balance stood around 3 trillion euros then compared with around 2 trillion now.
"We have emphasized that the combination of measures announced between June and September will have a sizeable impact on the balance sheet," Praet said.
He reiterated the ECB's readiness to do more should it become necessary.
"I can only repeat what the Governing Council said earlier, that it is unanimous in its commitment to using additional unconventional instruments within its mandate should it become necessary to further address risks of too prolonged a period of low inflation."
Reporting by Eva Taylor and Andreas Framke; Editing by Paul Carrel