Bundesbank's Dombret says ECB must think of timely exit
FRANKFURT (Reuters) - The European Central Bank must ensure that its crisis-fighting measures do not distort financial markets and give rise to new crises, Bundesbank board member Andreas Dombret said on Monday.
"In handling the sovereign debt crisis, the Bundesbank will continue to advocate setting the right incentives," Dombret said in the text of a speech, to be given at a Bundesbank event in Hamburg.
"For monetary policy that means that we should not lose sight of an exit from extraordinary measures and to carry that out when the opportunity comes."
Throughout the financial crisis the ECB has offered banks unlimited amounts of central bank funding, for example by handing out ultra-long 3-year loans, and it has bought government and private-sector debt.
The Bundesbank has vehemently opposed the government bond purchase programs in particular, saying they blurred the line between monetary policy and government financing.
Dombret also said that financial market tensions have significantly eased since last summer.
(Reporting by Sakari Suoninen)