MUNICH (Reuters) - European Central Bank Governing Council member Jens Weidmann warned on Thursday against keeping interest rates too low for too long, saying all central banks faced the challenge to exit loose monetary policy once risks to price stability emerged.
"The extremely low interest rates, which we currently have in many economies, are in the long term tied to risks," Weidmann said in a text of a speech at an economist club event in Munich.
"Because of that all central banks face the challenge of tightening the reins at the right moment, when dangers to price stability emerge."
Weidmann, also head of Germany's Bundesbank, said central banks had stretched their mandates during the financial crisis and warned that if a central bank meddled in fiscal policy, it would eventually lose the ability to keep prices stable.
(Reporting by Sakari Suoninen)
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