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ECB Should Retain Pace Of QE, Mersch Says

The European Central Bank should maintain the pace and volume of interventions so that inflation rises back towards 2 percent as quickly as possible, Executive Board Member Yves Mersch said Monday.

Despite the success of the quantitative easing, "it is important that we do not get carried away," he said at the Swedbank Economic Outlook Seminar. "Unconventional monetary policy must remain exceptional and time-bound."

This is because the longer such measures persist, the greater the risks that can come with it, he observed.

What anchors trust in the central bank is the objective and strategy and this is even more important when monetary policy becomes more unconventional, Mersch added.

"For this reason, innovative ideas to change our strategy, such as targeting a price level, would in fact be counterproductive in the current environment." Out goes also the misguided idea to increase our definition of price stability, the banker said.

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