ECB’s Centeno: Risk of Doing Too Much With Monetary Policy Is Real
18 September 2023
By David Barwick – FRANKFURT (Econostream) – European Central Bank Governing Council member Mario Centeno on Monday indicated that he accepted last Thursday’s 25bp rate hike but warned that there was a risk of doing too much.
In an interview with Spanish daily El País posted on the website of the Bank of Portugal, which he heads, Centeno said that if rates were kept at the current level, ‘we will do something decisive so that inflation can converge to 2%’.
‘The most important thing at this point was to provide some predictability so that we can adapt to what is expected in the coming months’, he said. ‘The risk of doing too much is always present in monetary policy, it happened in 2008 and 2011 when the ECB had to backtrack because raising rates was not compatible with price, financial and economic stability. That risk is real and we have to be vigilant.’
However, he said, the decision having been made to hike, ‘we are all involved in it, beyond personal opinions.’