Nowotny says they will take a decision on extending QE in December
There will be two decisions in December, Nowotny said. One on to what extent to prolong QE and the other on what assets to buy.
That's a critical distinguishing line. He confirmed the report yesterday from Reuters sources that it won't be a matter of whether or not to extend QE, it will be a question of how much and for how long.
Other comments:
- Nowotny says low rates are caused by low inflation, worldwide.
- ECB will avoid Japanese-style inflation
- Markets are prepared to deal with long-term, low interest rate environment
- Monetary policy has been successful but needs to be aided by fiscal policies
- Loan dynamics gradually recovering
- Europe must be aggressive on growth rates