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Economy

Emerging market debt should be closely monitored: French central banker

Villeroy de Galhau counsels patience before taking next step to monetary normalization

Francois Villeroy de Galhau took office as Governor of Banque de France on November 1, 2015.

TOKYO -- Over a month has passed since the European Central Bank took a major step toward policy normalization by halving the amount of monthly asset purchases to 30 billion euros ($35 billion), starting in January 2018. While the market is already eagerly guessing what the bank will do next, Francois Villeroy de Galhau, Banque de France governor and ECB Governing Council member, has some advice: Not so fast.

In an exclusive interview, Villeroy de Galhau told The Nikkei that the ECB will be patient on the next normalization move, with more than nine months remaining until the current proposed ending date of the program. He also mentioned debt evolution, especially in emerging countries, as one of the largest risks at the phase of accommodative policy rollback.

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