October 9, 2017 / 4:14 PM / a year ago

ECB policy hawk Lautenschlaeger calls for winding down asset buys

STUTTGART, Oct 9 (Reuters) - The European Central Bank should reduce its asset buys from next year with the aim of ending them altogether, as the factors holding down inflation are temporary, ECB Executive Board member Sabine Lautenschlaeger said on Monday.

“I think we should begin reducing our bond purchases next year,” Lautenschlaeger, an outspoken policy hawk, said in Stuttgart. “This should be done gradually, until we are no longer purchasing additional bonds.”

“For even if we phased out our net purchases of bonds entirely, some monetary accommodation would remain in place,” she said. “This is because we reinvest all the money from maturing bonds.”

The ECB is due to decide on Oct 26 whether to continue bond purchases next year and signals coming from policymakers suggest that they will opt for lower volumes but also an extension of the scheme.

Reporting by Frank Siebelt; Writing by Balazs Koranyi and editing by Francesco Canepa in Frankfurt

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