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ECB must not keep policy ultra-loose for too long, Weidmann says

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The European Central Bank must not keep its monetary policy ultra-loose for too long or it may struggle to wind it down, ECB governing council member and German central bank governor Jens Weidmann said on Wednesday.

[FRANKFURT] The European Central Bank must not keep its monetary policy ultra-loose for too long or it may struggle to wind it down, ECB governing council member and German central bank governor Jens Weidmann said on Wednesday.

"An expansionary monetary policy stance is justified for now," Mr Weidmann said.

"But we must not over-extend the period of ultra-loose monetary policy, because various risks and side effects are part and parcel of the current policy stance.

"The longer a central bank pursues an ultra-loose monetary policy ... the greater the risk that a slight tightening of policy, or even expectations of a slight tightening of policy, will send market interest rates sharply higher," he said.

REUTERS