BRUSSELS: The European Central Bank's bond buying programme is working and has had positive effects on the economy, ECB governing council member Jan Smets said on Thursday.
The ECB launched its asset buying programme in March, designed to pump 1 trillion euros plus of new money into a sagging euro zone economy.
"The aim is, and you can call it effective already, to create macroeconomic stability which is also good for financial stability," Smets told a news conference at Belgium's central bank.
Smets warned that an environment of low interest rates could lead to excessive risk-taking as investors sought higher yields but added that such an environment was primarily caused by macroeconomic imbalances which the programme sought to address.
"The low interest rates are temporarily supported by the programme, which has led to a search for yield in certain parts of the financial system or other risks," Smets said.
"But again, it would completely wrong to react to problems (of risk-taking) that arise in one part of the financial system or one country by not having quantative easing at all," he added. Smets said that, without the programme, the euro zone would have risked further slipping into a deflationary spiral.
"That risk is reduced," Smets said.
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