FRANKFURT Jan 13 A prolonged period of
accommodative monetary policy brings risks and low interest
rates may spur asset price bubbles, said Sabine Lautenschlaeger,
Germany's candidate for a vacant seat on the European Central
Speaking to a European parliament committee on Monday as
part of her vetting, Lautenschlaeger said economic data from the
euro zone suggested "we have seen the trough in economic
activity, even in the member states hit hardest by the crisis."
"A period of prolonged monetary policy accommodation with
interest rates being low for a long period is not without its
risks," she added.
"In fact low interest rates may be associated with spurring
asset price bubbles", she told the committee in Strasbourg.
Lautenschlaeger, who made her name as a banking supervision
expert, is the only candidate to succeed Joerg Asmussen, who
left the ECB two years into his eight-year term to rejoin the
German government as state secretary in the labour ministry.
The EU parliament is due to decide on Thursday whether to
back Lautenschlaeger and the European Council will then have the