June 8, 2016 / 9:00 AM / 3 years ago

ECB's Villeroy says there are limits to how negative interest rates can go

French Central bank Governor Francois Villeroy de Galhau attends the 2016 Institute of International Finance (IIF) Spring Membership meeting in Madrid, Spain, May 25, 2016. REUTERS/Susana Vera

BERLIN (Reuters) - European Central Bank Governing Council member Francois Villeroy de Galhau said on Wednesday that there limits to how far interest rates could be pushed into negative territory and urged care in the use of this measure.

“Not all unconventional instruments are legitimate. There are limits on how negative interest rates can go. So this type of unconventional measure, although useful, should be used with care,” Villeroy de Galhau said at an event in Berlin.

He added that so-called “helicopter money” would bring more harm than good. “We do not need it and it is not on the table,” he said.

Reporting by Noah Barkin and Michelle Martin

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