December 6, 2017 / 10:57 AM / in 12 days

ECB should plan for end of bond buys: Mersch

FRANKFURT, Dec 6 (Reuters) - The European Central Bank should start planning the end of its bond-buying programme since the economic recovery will make such stimulus unnecessary, ECB board member Yves Mersch said on Wednesday.

“While a too quick end to the buying program could lead to excessive market reactions, we should not forget that the longer the programme lasts, ... the greater the risks will become,” Mersch said in Frankfurt. “A credible perspective for an exit from QE is therefore key in curbing risks.”

Mersch did not discuss a timeline for ending quantitative easing (QE) in his speech and said the exit should conform to the developments in the real economy.

While the ECB extended its bond buys at a reduced pace until September and kept an option to extend it further, investors and many policymakers expect the scheme to end by the close of 2018.

Mersch added that the ECB should have a symmetrical approach to its inflation mandate rather than take a one-sided approach in fighting excessively low price growth. (Reporting by Francesco Canepa; Writing by Balazs Koranyi)

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