ECB needs to hold off on fresh stimulus - Lautenschlaeger

FRANKFURT (Reuters) - The European Central Bank should hold off on fresh stimulus measures, giving earlier policy moves time to work, Executive Board member Sabine Lautenschlaeger said on Tuesday, voicing clear opposition to calls for even bigger and longer asset buys. Speaking in Strasbourg, Lautenschlaeger said the ECB's negative rates and 80 billion euro per month asset buys were working but more stimulus risked becoming ineffective and could even magnify their negative side effects. ECB President Mario Draghi last week said the bank would look at various options to ensure the smooth implementation of its policies, and markets are fully pricing in a six month extension of asset buys, currently set to expire in March, as inflation is hovering well below the bank's 2 percent target. Considered a hawk, Lautenschlaeger has opposed many of the bank's past stimulus measures, voting in some cases against the majority and siding with Germany's Bundesbank. "Instead of new and always more extreme measures, we need a little patience," Lautenschlaeger said. "We will therefore need to be patient for a while before being able to make a final assessment of the purchase programme." "That's why I see no reason at the moment to change the key design elements of the purchase programme," she added. Lautenschlaeger also said sub-zero interest rates put a burden on savers, banks and insurance companies, could create asset bubbles, and may reduce pressure on governments to reform. "Despite these risks and side effects I still consider negative rates to be justified at the moment," Lautenschlaeger said. "But going beyond that I’m sceptical about further interest rate reductions." She warned that monetary policy on its own was insufficient to create lasting growth so its was ultimately up to governments to enact appropriate measures. (Reporting by Balazs Koranyi; Editing by Alison Williams)