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The ECB has been has extended its bond-buying stimulus program
into its fourth year, albeit at a reduced pace, even as growth
in the euro zone is on its best run for a decade and many
financial assets are at record highs.
Constancio acknowledged the risk for financial stability from
overly ebullient markets, but reaffirmed his long-standing call
for "gradualism" in policy tightening when asked.
"Yes because our mandate gives absolute priority to price
stability and to create the economic and financing conditions
for the normalization of inflation," he said in response to a
question about whether he stood by that view.
He was speaking after unveiling the ECB's biannual Financial
Stability Review, in which Frankfurt said risks to euro zone
financial stability were contained even if vulnerabilities
remained.
Constancio added that a market correction elsewhere in the world
could affect Europe but would not necessarily warrant further
stimulus from the ECB.
"Some correction of prices in asset markets would not be enough
to derail the economic recovery," he said.
"Other, deeper events could, so...we would then adjust according
to what may happen."
(Reporting By Francesco Canepa; Editing by Toby Chopra)
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