ECB bond buying must remain limited: Asmussen

6th January 2012, Comments 0 comments

New European Central Bank board member Joerg Asmussen has defended the bank's purchases of government bonds but said they must remain limited, in a television interview to be aired Saturday.

"I think that (ECB chief) Mario Draghi has been clear on the fact that these purchases of government bonds are compatible with the ECB's mandate," Asmussen told the German regional broadcaster SWR.

"They serve to compensate for disturbed mechanisms of monetary policy transmission," he said according to a summary released early.

"But they are limited in time as in the volumes, that also must be said clearly."

It is the first interview by the German, a former deputy finance minister, since taking up his position on the board of the Frankfurt-based ECB on January 1, where he will be responsible for international and European relations.

Several European governments have put pressure on the ECB to step up its programme of buying bonds, seen by some as a possible solution to the debt crisis.

But the ECB, backed by Germany, has steadfastly refused, arguing that its sole responsibility is to keep eurozone prices stable.

ECB chief Mario Draghi has insisted that the bank's programme of buying up the sovereign bonds of debt-wracked countries was limited and temporary.

© 2012 AFP

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