ECB’s Nowotny: avoiding vicious circle is big task

VIENNA, May 31 (BestGrowthStock) – Preventing a vicious circle in
which the debt crisis pulls down the economy is a major
challenge for the European Central Bank, ECB Governing Council
member Ewald Nowotny said on Monday.

“The big challenge is to prevent a vicious circle in which
(a) crisis of the public sector again leads to crisis
developments in the financial and real sectors of the economy,”
he told an Austrian National Bank conference on central banking
after the crisis.

Nowotny also said agreeing on new financial regulations
raises some difficult questions.

“The introduction of macroprudential tools is a
‘game-changer’ that raises very complex questions of interaction
between, and coordination of, monetary policy and … regulatory
instruments,” he added.

The ECB is giving a clear priority to its mandate of stable
prices, Nowotny said.

Investment Advice

(Reporting by Martin Santa and Sakari Suoninen; editing by
John Stonestreet)

ECB’s Nowotny: avoiding vicious circle is big task