MNI I'VIEW2: Post-APP ECB Burden To Move To States - Valimaki

By Silvia Marchetti

     ROME (MNI) - Monetary policy normalisation will see a shift in

responsibility for increasing growth and for maintaining fiscal sustainability

away from the European Central Bank onto member states and common European Union

initiatives, Tuomas Valimaki, Bank of Finland's chief economist, told MNI in an

exclusive interview. 

     Valimaki, who also serves as a member of the ESCB's Monetary Policy

Committee, said that the ECB's extreme prudence during the monetary policy

unwinding phase and in its forward guidance strategy would limit the rise of

instability risks across the Eurozone once the asset purchases program

terminates and interest rates are raised.

     According to Valimaki, co-author of recently a published book 'Central

Banking in Turbulent Times', some of the burden placed on the ECB's shoulders in

returning to unconventional measures and thus blurring the boundaries between

fiscal and monetary policies, "will hopefully be lifted by the initiatives there

are for deepening of EMU".

     This includes the completion of the Banking Union, efforts to improve the

functioning of the capital markets across the EU and strengthening the capacity

of the European Stability Mechanism (ESM) to act as a buffer in crises, he said.

--MNI London Bureau; tel: +44 203-586-2225; email: les.commons@marketnews.com

[TOPICS: M$E$$$,M$X$$$,MC$$$$,MX$$$$,M$$EC$]