September 13, 2019 / 9:37 AM / 2 months ago

ECB hawk Knot slams stimulus as disproportionate, ineffective

AMSTERDAM, Sept 13 (Reuters) - The European Central Bank’s fresh stimulus package is disproportionate and may be ineffective, Dutch central bank chief Klaas Knot, a frequent critic of the bank’s ultra-easy monetary policy, said on Friday.

“This broad package of measures, in particular restarting the asset purchase programme, is disproportionate to the present economic conditions, and there are sound reasons to doubt its effectiveness,” Knot said in a statement, referring to the ECB’s decision on Thursday to provide even more stimulus.

“There are increasing signs of scarcity of low-risk assets, distorted pricing in financial markets and excessive risk-seeking behaviour in the housing markets,” added Knot, a member of the ECB’s policy-setting Governing Council. (Reporting by Bart Meijer Writing by Balazs Koranyi Editing by Catherine Evans)

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