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Diverging monetary policies a risk of instability: ECB's Noyer

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ECB governing council member Christian Noyer warned on Tuesday that diverging euro zone and US monetary policies could present a risk of instability for jittery financial markets.

[PARIS] ECB governing council member Christian Noyer warned on Tuesday that diverging euro zone and US monetary policies could present a risk of instability for jittery financial markets.

Mr Noyer, who is also governor of the French central bank, said the divergence had emerged as the US Federal Reserve looked to begin withdrawing its exceptional monetary stimulus while the European Central Bank had committed to keeping interest rates durably low. "It (the divergence) can be a cause of instability as markets react instantly to any new information and their impact on monetary policy," Mr Noyer told journalists at a news conference.

Mr Noyer also said that exceptionally low interest rates warranted great vigilance towards the risks of financial market volatility.

REUTERS

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