* Says requirements for plan should be particularly high
* Sees risks from having interest rates on bonds too low
* Comments show resistance of some at ECB to a QE programme
HAMBURG, July 7 (Reuters) - The European Central Bank should only embark on a broad asset-buying programme in the event of an emergency such as the immediate prospect of deflation, ECB Executive Board member Sabine Lautenschlaeger said on Monday.
The ECB’s president, Mario Draghi, told his monthly news conference last Thursday that the bank’s Governing Council was “unanimous in its commitment to also using unconventional instruments within its mandate, should it become necessary.”
Lautenschlaeger said a broad asset-purchase programme was, in principle, part of the ECB’s arsenal but that the requirements for using such a plan should be “particularly high”.
“Only in a real emergency, for example in the case of the immediate prospect of deflation, could, in my view, such an instrument come into consideration,” Lautenschlaeger said in the text of a speech for delivery in Hamburg.
“Such risks are, however, neither perceptible nor do we expect them.”
Lautenschlaeger’s stiff resistance to embarking a U.S.-style programme of creating money to buy assets - so-called quantitative easing (QE) - shows the strength of opposition in some quarters at the ECB to such a policy.
Bundesbank chief Jens Weidmann, who also sits on the ECB’s policymaking Governing Council, said after Draghi’s news conference last Thursday that the ECB should not leave policy too loose for too long.
Lautenschlaeger, a former Bundesbank vice president, said the requirements for using a broad asset-buy plan should be high because the side effects are large.
Having interest rates on sovereign and corporate bonds that are too low could set false incentives and build up risks, she said, adding that the monetary policy motivation for embarking on a broad asset-buy plan would have to be “without question”. (Reporting by Jan Schwartz; Writing by Paul Carrel; Editing by Toby Chopra)