ECB's Liikanen: Asset purchase program could be implemented if deflation risks rise

FXStreet (Łódź) - ECB Governing Council member Erkki Liikanen said on Tuesday that, should the need arise, the central bank could implement various easing measures at the upcoming meeting, such as a broad-based asset-purchases of securities.

Moreover, forward guidance could be strengthened in response to an increase in the deflation risk, Liikanen suggested. In case money markets rise, the possible countermeasures include finalizing SMP sterilization, adjusting the rate corridor, reducing rates or carrying out long-term lending operations.

Conducting lending operations or bypassing banks in funding would be appropriate in case of a considerable reduction in bank lending, the ECB policymaker added.