ECB QE Has Run Its Course, Says UBS Chairman
January 22 2016 - 10:50AM
Dow Jones News
UBS AG Chairman Axel Weber warned Friday that the European
Central Bank's bond-buying program, known as quantitative easing,
has little power left to boost the continent's sluggish
economy.
"There may be no limit to what the ECB is willing to do but
there is a very clear limit to what QE can and will achieve," said
Mr. Weber on a CNBC panel at the World Economic Forum in Davos,
Switzerland. "The problem is that monetary policy has largely run
its course."
His comments came just a day after ECB President Mario Draghi
signaled that the body might provide more stimulus to the European
economy at its next meeting in March. The ECB Thursday also left
its key interest rates unchanged, despite plummeting oil prices and
growing fears over China's economic growth.
Benoit Coeuré , a member of the ECB's executive board, speaking
on the same panel as Mr. Weber, defended the central bank's
policies. "QE is working. We've seen a tremendous improvement in
the eurozone's capital markets and banking markets."
The panel more broadly discussed the new reality for banks after
a bevy of regulatory changes in the wake of the global financial
crisis.
Italy's economy minister, Pier Carlo Padoan, said his country
plans to implement further reforms for smaller banks to encourage
more capital raising. He attributed much of the banking sector's
troubles to a misunderstanding of the new reality.
"We are entering a totally new world," he said. "The bail-in
world is very different from the past. If you move from one world
to another world, there is a transition. Not all the actors
involved appreciate what the new world means for behavior."
Write to Shayndi Raice at shayndi.raice@wsj.com
(END) Dow Jones Newswires
January 22, 2016 10:35 ET (15:35 GMT)
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