RTTNews - Central banks should not take on credit risk unless there are good reasons for doing so, European Central Bank Executive Board member José Manuel González-Páramo said Thursday.
Speaking at Risk Europe conference in Frankfurt, González-Páramo said central banks Must not take inappropriate decisions which could have a direct and significant impact on the allocation of public money - for instance taking excessive amounts of credit risk onto their own balance sheets.
His remarks came on the same day when the ECB left its key interest rate unchanged at a record low of 1%. The bank's President Jean-Claude Trichet said the ECB will start its plan to buy 60 billion euros of covered bonds in the primary and secondary markets next month.
Further, the central banker said the primary objective of the ECB and the Eurosystem is the maintenance of price stability and interest rate policies should remain geared towards that primary objective.
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