Dec. 12 (Bloomberg) -- Benoit Coeure, France’s candidate for a seat on the European Central Bank’s executive board, said the ECB might have to expand the purchase of sovereign bonds on the secondary market to help stem the debt crisis.
“If we feel that there is a deterioration in terms of the transmission of monetary policy, then we should do more,” Coeure told a European Parliament confirmation hearing today in Strasbourg, France. “I don’t think it’s the situation right now. But the ECB certainly has to keep its eyes peeled on the development of the market situation and should be ready to adapt.”
Coeure, currently chief economist at the French Treasury, would give Europe’s second-largest economy a voice on the ECB board and fill the seat being vacated by Italy’s Lorenzo Bini Smaghi. France supported Italian Mario Draghi taking over from Jean-Claude Trichet as ECB president on the condition Bini Smaghi step down early to make way for a Frenchman in the ECB’s six-member executive.
Coeure said any ECB decision to expand its bond-buying program would have to be consistent with the central bank’s primary goal of price stability and would need to be taken independently.
In the event the debt crisis worsens, “the modality and size of the program should be tweaked accordingly,” he said. Coeure also said the ECB’s non-conventional measures could last through 2012.
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