Easy ECB policy must to stimulate economy

HELSINKI: The European Central Bank´s ultra-easy monetary policy of low interest rates and aggressive bond buying is necessary to support the euro zone´s economy, ECB rate setter Erkki Liikanen said on Thursday.

Bond markets have been rattled by speculation the ECB might reduce the pace of its bond purchases, currently at 80 billion euros ($89.54 billion) per month, although the central bank says that has not been discussed by its policymakers.

Governing Council member and Finnish central bank governor Liikanen said the ECB´s policy was needed and concerns that it is fuelling asset-price bubbles and squeezing bank profits in some regions should be tackled by other means.

"In order to support the economy and bring inflation back to its target, (the) monetary policy stance has been accommodative," the Finnish central bank´s governor said at an event.  "This is the backdrop against which the current low interest rates and the use of unconventional monetary policy measures are necessary.

"Finland´s economy has been in the doldrums for the past decade, hit by a series of factors including the decline of Nokia´s former phone business, a recession in neighbouring Russia and high labour costs.