"With the dramatic expansion of its balance sheet since last summer, the ECB has become the most active central bank in the world"
- Klaus Baader, chief euro-area economist at Societe Generale
The European Central Bank's balance sheet rose to a record 3.02 trillion euros for the week ended March 2, after a second long term refinancing operation conducted by the Frankfurt-based ECB.
"With the dramatic expansion of its balance sheet since last summer, the ECB has become the most active central bank in the world," said Klaus Baader, chief euro-area economist at Societe Generale in London.
"The ECB's measures are absolutely justified, but it has to be aware of the risks on its balance sheet and think of an exit strategy."
"Central bank liquidity buys politicians time," said Stephen Gallo, head of market analysis at Schneider Foreign Exchange in London. If they fail to use it wisely, "history will likely judge the damage done by central bank liquidity injected today as irreparable," he said.
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