The European Central Bank (ECB) Governing Council member Jens Weidmann said on Friday that the central bank’s low-interest-rate policy for a longer period could lead to a sudden hike in risk premiums.
“Monetary policymakers have to take this into account in order to avoid unintended consequences,” he added.
Weidmann pointed out that the ECB should consider financial imbalances.
“Monetary policy would be wise to take the implications of financial imbalances for price stability into account,” he noted.
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