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ECB's Coeure warns buying bonds for too long can cause bubbles
October 12, 2017 / 8:07 PM / 2 months ago

ECB's Coeure warns buying bonds for too long can cause bubbles

WASHINGTON (Reuters) - Central banks risk causing financial bubbles if they keep buying bonds for too long, European Central Bank director Benoit Coeure said on Thursday, two weeks before the ECB decides on the future of its stimulus programme.

Benoit Coeure, board member of the European Central Bank (ECB), is photographed during an interview with Reuters journalists at the ECB headquarters in Frankfurt, Germany, May 17, 2017. REUTERS/Kai Pfaffenbach

“We need to be mindful of risks to financial stability,” Coeure, long considered an ally of president Mario Draghi on the Executive Board, said at en event in Washington.

“A too protracted period of asset purchases, for example, may cause financial imbalances to build up with potentially adverse consequences for price stability.”

Reporting By Balazs Koranyi; Writing by Francesco Canepa in Frankfurt; Editing by Toby Chopra

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