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"There is a stage when financial markets are
feeling around to adjust to a new balance," Coeure told members
of the French parliament in Paris.
"A correction was no harm in the sense that it disciplines
investors and shows there are risks in the system and that the
strategy of buying state securities is not always a sure
winner," he said.
Boosted by optimism that inflation may have bottomed out in the
euro region, benchmark German bond yields have surged in recent
weeks after falling to a record low in mid-April following the
launch of the ECB's quantitative easing program.
Coeure said the European Central Bank was closely monitoring any
risk that investors put in place speculative strategies and
could act if needed but that it was not worried at this stage.
"The ECB can intervene thanks to the (euro zone's) new banking
rules ... if it considers that national authorities are not
strict enough," he said.
The remarks address the concerns of some economists, who fear
that record low borrowing costs and money printing by the ECB
could fuel bubbles, for instance, in property markets.
(Reporting by Jean-Baptiste Vey and Yann Le Guernigou; Writing
by Brian Love; Editing by Ingrid Melander and Hugh Lawson)
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