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ECB's Weidmann:long-term loans should not result in carry trades
December 20, 2013 / 7:41 AM / in 4 years

ECB's Weidmann:long-term loans should not result in carry trades

FRANKFURT, Dec 20 (Reuters) - 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.

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