Volker Wieland: "The ECB is still in crisis mode" (Goethe University web magazine)

According to Volker Wieland, the current monetary policy of the European Central Bank (ECB) is not adequate. "The ECB should have communicated a strategy and a time schedule for phasing out the bond purchases a long time ago", he said in an interview with Goethe University's web magazine.

In the background, new risks were piling up due to the expansive monetary policy, Wieland warned. The ongoing low-interest rate policy poses a threat to financial stability. "If there is a turnaround on interest rates, banks can get into trouble", Wieland said.

In his opinion, the initiative of applying rules to monetary policy and communicate with regard to such rules, which could recently be observed in the United States, could be positive. To him it is not a constraint, but "a means of better communication and accountability". Rules could even serve to bolster the Federal Reserve’s independence "if ever a President would try to exert pressure on the Fed to keep interest rates too low for too long in order to boost activity during his or her term".

The complete interview with Volker Wieland is available in the Goethe University's web magazine (German)