ECB’s Rehn says normalizing monetary policy will take time

HELSINKI (Reuters) – Returning Europe’s super-easy monetary policy to normal will be a very long and gradual process, Olli Rehn, the head of the Bank of Finland and a member of the European Central Bank’s governing council said on Saturday.

“Interest rates will slowly and gradually rise, starting towards the end of next year, and this whole normalization of monetary policy will be a very long and a gradual process,” Rehn told Finland’s public broadcaster YLE.

Rehn was previously the European Union’s top economic official before succeeding Erkki Liikanen as the governor of Finland’s central bank in July.

Asked about Italy’s plans to increase its budget deficit, Rehn called the development “worrisome”.

“Italy’s banks have quite a few problematic credits, above the euro zone average … and Italy’s government is crossing the commitments it has made towards its European partners,” he said.

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