Warning over handling of debt crisis

The European Central Bank must ensure that its crisis-fighting measures do not distort financial markets and give rise to new crises, Bundesbank board member Andreas Dombret said.
By The Newsroom
Published 19th Feb 2013, 00:00 BST

“In handling the sovereign debt crisis, the Bundesbank will continue to advocate setting the right incentives,” Mr Dombret said yesterday.

“For monetary policy that means that we should not lose sight of an exit from extraordinary measures and to carry that out when the opportunity comes.”

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Throughout the financial crisis the ECB has offered banks unlimited amounts of central bank funding, for example by handing out ultra-long three-year loans, and it has bought government and private-sector debt.