BERLIN, July 20 German Finance Minister Wolfgang
Schaeuble called on central banks to take into account price
distortions that monetary policy could have on markets and help
prevent asset bubbles, in an interview to be published on
Schaeuble sees "signs of bubbles forming on parts of the
real estate markets", he said in a joint interview with French
counterpart Michel Sapin in the Monday edition of Handelsblatt.
"We cannot just leave the prevention of (asset) bubbles to
the state supervisors. Central banks must keep that in mind when
they take their decisions about money supply," Schaeuble was
quoted as saying.
But even as Schaeuble reiterated his warning that
ultra-loose monetary policy could lead to distortions on asset
markets, he rejected French calls for the European Central Bank
(ECB) to purposely weaken the value of the euro.
"I think nothing of political discussions about the exchange
rate. It is formed on the market. If politics looks after that,
it will not lead to good results," he said.
French officials have called for the ECB to weaken the euro
and thereby help make euro zone economies more competitive.
The ECB targets price stability, which it defines as just
under but close to 2 percent consumer price inflation.
The joint interview comes against the backdrop of a debate
among policymakers in the single currency area about the
flexibility of their rules on government budgets and spending.
Sapin said France was not looking for extra time to meet its
"It is not about asking for more time. I want to stick to
the European rules and, together with the partners, find the
right timing to lower our spending and deficits and at the same
time support growth," Sapin told Handelsblatt.
"Sustainable growth is not possible with continued, high
deficits," Sapin said.
In another interview published on Sunday, the head of
Germany's Sparkassen savings banks association said he feared
that expansive monetary policy could lead to price bubbles.
"Because so much money is coming from all angles, we are
once again seeing that irresponsible risks are being taken,"
Georg Fahrenschon told Welt am Sonntag.
Schaeuble also said, however, that the banking sector as a
whole was now less risky after banks had acquired additional
"There will always be problems ... but the danger of
contagion is much lower," he was quoted as saying.
(Reporting by Annika Breidthardt; editing by Jane Baird)