Germany’s top central banker Axel Weber has staged an ambush at Economics21’s Shadow Open Market Committee conference in New York.
He’s thrown a surprise punch at the European Central Bank, and perhaps its head Mr. Jean-Claude Trichet as well, for buying the government bonds of nations such as Spain and Greece in a bid to support credit markets.
He thinks that ECB bond purchases “should now be phased out permanently” since it “risks blurring the different responsibilities between fiscal and monetary policy,” and “there is no evidence that asset purchases have had any significant impact” on sovereign bond yields, according to the Wall Street Journal.
Inflation is a huge threat that Europe shouldn’t play games with — “I think that if a central bank signals it wants higher inflation, they usually get it. That’s a concern, not a reassurance.”
This is the man many think could become Trichet’s successor as head of the ECB.