ECB Should Exit Exceptional Policies Once Economic Conditions Ripe, Says Coeure

The European Central Bank should exit from non-standard measures and return to a less accommodative policy stance once the economic conditions ripe, Executive Board member Benoit Coeure said Monday.

"We can withdraw the ample liquidity created as a side effect of the long-term operation whenever the Governing Council deems liquidity conditions are excessive in view of the outlook for price stability," he said.

"All the tools necessary for large-scale liquidity withdrawal are already in place or will be readily available when needed," said Coeure.

A prolonged period of monetary policy accommodation might fuel excessive risk-taking, leverage and asset price bubbles, Coeure added. Moreover, it might discourage banks, companies and governments from strengthening their balance sheets and therefore create a dependence on low rates.