ECB policymakers clash over how to treat sickly euro zone economy
Credit: Reuters/Ralph Orlowski
President of the German federal reserve (Deutsche Bundesbank) Jens Weidmann smiles during an open day of the Bundesbank in Frankfurt July 12, 2014.
The comments from Weidmann, who is chief of Germany's Bundesbank, push back at a thinly-veiled appeal from ECB President Mario Draghi for Germany to increase its public investment levels to help support the euro zone economy.
'The boost to the peripheral countries from an increase in German public investment is ... likely to be negligible,' Weidmann said in the next of a speech for delivery in Riga.
'And with the economy operating at normal capacity utilization, Germany is not in need of stimulus either - and this will remain the case with the revised forecasts that still foresee growth in line with potential,' he added.
Turning to the ECB's plans to buy asset-backed securities - bundled loans - Weidmann said such purchases 'are problematic when they imply a transfer of risks from banks to the balance sheet of the central bank.'
'In the end, this could amount to a transfer of risks from banks to the taxpayer,' he added.
(Reporting by Aija Braslina in Riga, writing by Paul Carrel in Frankfurt)
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