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ECB's Hansson wary on bank's new stimulus measures

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The European Central Bank's fresh stimulus package could prevent governments from enacting structural reforms instead of spurring them and the measures could also fuel asset bubbles, ECB Governing Council member Ardo Hansson said on Wednesday.

[TALLINN] The European Central Bank's fresh stimulus package could prevent governments from enacting structural reforms instead of spurring them and the measures could also fuel asset bubbles, ECB Governing Council member Ardo Hansson said on Wednesday.

"My main concern is about the side effects - for example, effects on the financial stability - if the asset price rises, we may, sooner or later, call this a bubble. Conservative market participants may also begin to take unsuitably large risks," Mr Hansson told Estonian business daily Aripaev.

Mr Hansson, who is also Estonia's central bank governor, was one of the few dissenters of the ECB's unexpectedly big stimulus package last Thursday, which included rate cuts and a fresh round of ultra cheap loans.

Mr Hansson said he was also concerned the stimulus measures may make it too easy for governments to put off completing necessary reforms.

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"People are people, politicians are politicians, and if they are given the chance to breathe more easily, then sometimes they do it that way," Mr Hansson said.

REUTERS