ECB's Noyer calls for cap on possible quantitative easing programme - paper

FRANKFURT (Reuters) - European Central Bank Governing Council member Christian Noyer called for a cap on possible large-scale purchases of government bonds by the ECB to avoid the crowding out of private investors. Noyer, governor of the French central bank, told Handelsblatt in an interview that nothing had been decided so far and that the debate was "not only about whether we should do it at all but also about when we should do it". The ECB Governing Council gathers on Jan. 22 for its next policy meeting and could then decide to start printing money to buy large amounts of government bonds, a step also known as quantitative easing, to prevent deflation from taking hold. "My personal reading is that if we were to decide to have a government buying program, we should have a cap in terms of the percentage of what we would be buying, so that most of the financing will continue to rely on the private market," Noyer said in the interview that will be published on Tuesday. Such a cap should limit any ECB purchases to a certain share of each country's outstanding debt, he said. "In my view, such a program can be launched only if a majority of the debt would continue to be held by private investors," Noyer was quoted as saying. (Reporting by Eva Taylor and Paul Carrel)