English
The European Central Bank (BCE) should scale back or end its quantitative easing program earlier than it has planned, because the governments can not offset on their own the effects of the monetary policy of the institution, according to the economic advisors of German chancellor Angela Merkel.
"The low interest rates pose a threat to the financial stability and erodes the business model of banks and insurers, in the medium term. These issues can not be resolved through macroprudential regulations", according to the annual report published yesterday by the advisor commission, made up of five economists.
The German economy, Europe's biggest, is forecast by the commission to expand by 1.7% this year and 1.6% in 2016.
The ECB quantitative easing program (bond purchases) has led to an extremely low interest rate level, for all maturities.
"The ECB should reduce the expansion of the institution's assets or even end the program earlier than it had planned", the report warns.
We remind that the ECB wants the asset purchases, of 1,100 billion Euros (launched in March 2015), to end in September 2016 at the earliest.
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