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Mexico cenbanker suggests financial bubbles action

Mon Mar 3, 2008 11:42am EST

MEXICO CITY, March 3 (Reuters) - Central banks should use monetary policy to control economic bubbles before they burst, Mexico's central bank deputy governor Everardo Elizondo said on Monday.

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"Monetary policy should perhaps be precautionary in order to avoid having to act urgently to correct" the situation, Elizondo wrote in a column in Reforma newspaper.

He made no specific mention of Mexico in the column. The article gave some insights into his views on monetary policy theory in general.

Elizondo was referring to bubbles in real estate and stock markets in the light of current economic troubles in the United States. (Reporting by Jason Lange, editing by Walker Simon)

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