Banque de France Governor François Villeroy de Galhau said the European Central Bank should not necessarily use all available tools to stimulate economic growth across the eurozone, joining others that have questioned the need to revive the ECB's bond-buying program.
Villeroy, an ECB policymaker, said in an interview with French magazine L'Agefi that the question of whether to resume quantitative easing was to be discussed at the ECB's meeting next week. He said the ECB's high levels of assets already accumulated lowered long-term yields, adding that cutting interest rates might be warranted to avoid a rise in short-term yields.
The ECB is widely expected to announce a stimulus package at its Sept. 12 meeting, with the next bout of bond buying estimated to be limited to less than half of the previous €2.6 trillion program.
But some ECB policymakers have signaled opposition to the resumption of bond purchases, including Klaas Knot and Jens Weidmann. Reuters reported, citing five sources familiar with the matter, that the opposition to quantitative easing is complicating whether to include it in the stimulus package to be rolled out next week.
