ECB'S Weber: Rates shouldn't be cut to help out banks

LONDON (Reuters) - Central banks should not cut interest rates in order to help banks with their refinancing needs, and instead should keep monetary policy focused on maintaining price stability, European Central Bank Governing Council member Axel Weber said on Friday.

Speaking at an event in London, Weber -- who is widely known for his tough anti-inflation stance -- maintained that the euro area economy "was at a different juncture to the U.S. economy."

"In particular, I see the situation in the housing market as being vastly different to the euro area," although there were pockets of weakeness in the single currency zone, Weber said.

The U.S. central bank has cut interest rates by over 300 basis points in a bid to stem a sharp slowdown sparked by the global credit crunch. But the ECB has maintained a strongly hawkish tone, defying calls from the financial sector to cut rates in order to get the banking system back on its feet.

Weber also said interest rates were too blunt a tool to tackle asset price bubbles.

"We should not as much focus on bubbles but basically monitor very closely the role of asset price through monetary policy transmission."