Despite the ongoing economic recovery "the ECB sticks to the crisis mode in monetary policy", Wieland said. In view of the inflation trend and the economic development in the euro area monetary policy is too expansionary, according to Wieland.
President Draghi as well as Vice President Constancio have referred to the lower equilibrium real interest rate with regard to the ongoing expansionary monetary policy. However, even if this is included in the Taylor rule, this leads to a positive and rising benchmark for the interest rate, Wieland argues. "Therefore, the tightening of monetary policy is overdue even if a lower equilibrium real interest rate is taken into account".
In his view, the expansionary monetary policy involves increasing risks concerning financial stability. This holds especially true for interest-change risks as Wieland points out.
Börsen-Zeitung: "Unkonventionelle Geldpolitik: Zeit für den Ausstieg"