ECB 'in danger of overload', says chief economist

The European Central Bank risks being overloaded by its new and huge task of watching over banks, executive board member Peter Praet warned in a newspaper interview on Friday. "The eurozone was set up with too few institutions actually capable of acting. We're now paying the price for that," he said. "We're being entrusted with more and more tasks," Praet, who is the ECB's chief economist, told the business daily Handelsblatt. "I wouldn't call this a politicisation" of the central bank, "but a possible overburdening," Praet said. Ever since the start of the eurozone's troubles, the ECB has been seen as the only institution capable of acting quickly enough to put out the crisis fires. From the second half of next year it will also take on the role of banking supervisor for the entire euro area. "It's an immense challenge," Praet said. The economist also said he was also in favour of a more open communication within the ECB, for example with the publication of the minutes of its meetings, as the US Federal Reserve does. "The speculation in this respect reinforces my belief that, sooner or later, we should publish the minutes. We're discussing this issue intensively," Praet said. At the ECB's policy-setting meeting last week, president Mario Draghi rang in what some observers saw as a "mini-revolution" by issuing so-called "forward guidance" by saying the bank's interest rates were expected to remain at their current record-low levels of fall even further "for an extended period of time." But on Thursday, the head of the German central bank or Bundesbank, Jens Weidmann, insisted that Draghi's comments were "no historic turning point in monetary policy communication.