Latest ECB policy steps will take time to have effect - Praet

PARIS, July 9 Wed Jul 9, 2014 4:11am EDT

PARIS, July 9 (Reuters) - The package of policy measures the European Central Bank announced in June will take time to have an effect on the euro zone economy, ECB Executive Board member Peter Praet said on Wednesday.

To breathe life into a sluggish euro zone, the ECB cut interest rates to record lows last month and launched a series of measures to pump money into the economy.

"All measures together should support lending to the real economy, support the economic recovery and - through that avenue - steer inflation rates to levels closer to 2 percent," Praet said in the text of a speech he delivered in Paris.

"As usual, effects on the real economy will take time as the measures will need to work their way through the economy."

Praet added that a protracted period of monetary accommodation may have implications for financial stability: "There are two major risks: first, postponement in bank balance sheet repair; and second, bubbles in asset prices."

However, he said concerns that the ECB's new targeted lending programme could stoke a housing bubble seemed unwarranted. (Reporting by Ingrid Melander; Writing by Paul Carrel Editing by Jeremy Gaunt)