FRANKFURT Dec 20 Were the European Central Bank
to give banks any more long-term loans, it should ensure that
the money is not just used to buy government bonds, ECB
Governing Council member Jens Weidmann was quoted as saying.
Weidmann, in an interview with German weekly
Wirtschaftswoche, also said that the central bank should not
take on too big a role in trying to ensure banks lend to certain
sectors or regions.
"In any potential future operations, we should seek to avoid
this," Weidmann told Wirtschaftswoche.
"The simplest and most coherent way to do this would be by
pricing, which would make such carry-trades unattractive."
Weidmann also said that deflation risk in the euro zone was
very limited. The ECB was ready to act if needed, he added.