November 12, 2019 / 2:43 PM / a month ago

Side effects of ECB policy becoming more tangible - De Guindos

FILE PHOTO: European Central Bank (ECB) Vice-President Luis de Guindos attends a news conference on the outcome of the meeting of the Governing Council, in Frankfurt, Germany, September 12, 2019. REUTERS/Ralph Orlowski

BERLIN (Reuters) - The side effects of the European Central Bank’s monetary policy are becoming more tangible, ECB Vice President Luis de Guindos said in remarks published on Tuesday, promising closer scrutiny of any adverse consequences.

“We have scope to take further action, and we will take further action should it become necessary,” de Guindos told the Boersen-Zeitung newspaper. “But it’s also clear, as I said, that the negative side effects are becoming ever more pronounced. What’s more, in the current environment, with interest rates very low for longer, fiscal policy would have a much bigger impact on the economy than would otherwise be the case.”

He added: “So fiscal policy will need to play a much stronger role in future. We are well aware of the side effects of our monetary policy and we will hold the side effects up to even closer scrutiny in future and pay them even more attention.”

Reporting by Joseph Nasr; Editing by Madeline Chambers

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