Volker Wieland criticizes new ECB measures ("Boerse.ARD.de", "n-tv.de", "FAZ")

After the European Central Bank (ECB) had announced to cut all its main interest rates, expand its bond-buying program, and unveiled a new lending programme to banks, Volker Wieland has strongly criticized the new measures. The ECB was chasing after the oil price, he said to the German newspaper "Frankfurter Allgemeine Zeitung".

With an inflation rate at three percent some years ago, the ECB refrained from interfering apart from two small interest rate hikes argueing that it didn't want to overreact. This time ECB should have adhered to this proceeding, Wieland wrote in an op-ed for the German news website "n-tv.de". There was no dangerous deflation looming.

In his opinion, the ECB had made a big move in March 2015 with the bond-buying program, which had already been too much. The program was associated with major risks. "Volatility on financial markets is increasing", Wieland warned. This could lead to overreactions.

In view of the economic development in Germany with increasing wages the current monetary policy was not appropriate, Volker Wieland said in an interview with "FAZ". In his opinion, however, monetary policy for the euro area as a whole was also extremely loose. The bond-buying program should be reduced instead of expanded, he warned.

Boerse.ARD.de: "Ökonomen zur weiter gelockerten EZB-Geldpolitik"
n-tv.de: "Draghi hetzt dem Ölpreis hinterher - EZB weitet ihren Fehler aus"
FAZ: "Richtiger EZB-Kurs oder Geldpolitik für Zombies?"

FAZ: "Weltgrößter Rückversicherer greift EZB-Nullzinspolitik an" (17.03.16)