ECB’S HOLZMANN: CENTRAL BANK IS AWARE OF QT RISKS

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The European Central Bank (ECB) is conscious of the dangers of moving too fast in cutting reinvestments from its asset purchase programme, particularly after seeing last year's UK gilt market volatility,“ the central bank policymaker Robert Holzmann told MNI in an interview.



"I think we all want to have a smaller balance sheet, but we are all still a bit unsure how much the financial system can support, and at what speed?"


"Even the people who continue to be more on the hawkish side take this seriously because it's difficult to anticipate what's going to happen. The UK experience is something which is in our minds there."


"The discussion of QT will be part of the discussion around our future price-setting system.”


"The other part has to do with PEPP, which is currently used as a kind of buffer towards differences in spreads. It's proved a useful instrument, but you cannot keep this system forever. Or you have to give it a different rationale."

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