ECB's Coeure says that monetary policy is limited in what it can do

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The European Central Bank's (ECB) Benoit Coeure has said that there are limits in what monetary policy can achieve, but that the actions of the ECB have prevented a Eurozone catastrophe.

Coeure said that he sees an improvement in financial conditions in the monetary union, but that banks must continue to clean up balance sheets.

Later Coeure stated that income distribution and economic justice were outside the remit of the ECB, but that price stability can foster more even income distribution.

Earlier the ECB's Ewald Nowotny said that the limits of monetary policy are obvious, but that an accomodative stance is still needed. He said that he saw a strugglign real economy and stretched public finances, but that there is no meaningful alternative to the ECB strategy.

Nowonty said that while a fair amount of stabilisation had been achieved in the EU banking sector, and that it makes sense to start the Single Supervisor Mechanism with fewer banks.