Published October 26, 2012
FRANKFURT – The European Central Bank will not crank up the bank note printing presses with its new bond-purchase program, ECB policymaker Joerg Asmussen said on Friday, seeking to reassure his fellow Germans that the plan will not fuel inflation.
Asmussen's comments echoed similar remarks from ECB President Mario Draghi on Wednesday and countered criticism from Germany's powerful Bundesbank that ECB purchases of sovereign bonds are "tantamount to financing governments by printing banknotes."
"I can assure you: purchases of government bonds will have no inflationary consequences," Asmussen said in the text of a speech for delivery in Kronberg, near Frankfurt. "The 'bank note printing machines' will not be cranked up."
Asmussen said under the new plan - dubbed Outright Monetary Transactions (OMT) - the ECB would 'sterilize' any bond buys by absorbing an equivalent amount of money out of the financial system, adding that "inflation expectations are solidly anchored in the euro area".
(Writing by Paul Carrel)