Volker Wieland considers reduction of ECB balance sheet appropriate ("Frankfurter Allgemeine Woche")

According to Volker Wieland, the expansion of the European Central Bank's (ECB) balance sheet is no suitable tool for inflation targeting. "The effects of an expansion of a central bank's balance sheet on the price level is relatively uncertain and rather small," he said in an interview with the magazine "Frankfurter Allgemeine Woche".

In Wieland's opinion, there is no reason for a monetary policy in crisis mode. At the end of 2018, the ECB's balance sheet was 2,2 times higher than in 2014. This was mainly due to the bond purchase program, especially the Public Sector Purchase Programme (PSPP). The size of a central bank's balance sheet is closely intertwined with its monetary policy.

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