frankfurt<u+2014>german central-bank president jens weidmann called for a <u+201c>levelheaded<u+201d> response to donald trump <u+2019>s unexpected victory in u.s. elections, but warned that uncertainty over the future direction of u.s. policy was weighing on the eurozone<u+2019>s growth prospects. <u+201c>i would first of all advise calm and levelheadedness,<u+201d> mr. weidmann, who sits on the ecb<u+2019>s 25-member governing council, said in a speech in berlin. he pointed to comments in mr. trump<u+2019>s victory speech , indicating that the president-elect would deal fairly with other nations and seek common ground. <u+201c>let<u+2019>s take the newly elected president at his word,<u+201d> mr. weidmann said. but the bundesbank president warned that the u.s. election result, together with britain<u+2019>s vote to leave the european union , raised questions over how far protectionism will determine the future political agenda. <u+201c>a significant part of our prosperity is based on open markets and functioning institutions,<u+201d> mr. weidmann said. ecb policy makers are currently preparing for a key meeting on<u+00a0>dec. 8, when they are expected to decide on the future of their <u+20ac>80 billion a month bond-purchase program, which is due to end in march. some analysts say mr. trump<u+2019>s victory makes it more likely that the ecb will extend or boost its bond purchase program. mr. weidmann<u+2014>long a critic of the ecb<u+2019>s bond purchases<u+2014>stressed that the central bank<u+2019>s easy-money policies shouldn<u+2019>t be kept in place for too long. he said their effectiveness faded over time even as their adverse side effects mounted, including declining profit for the region<u+2019>s banks. <u+201c>the therapy of an ultraloose monetary policy shouldn<u+2019>t be continued for longer than needed,<u+201d> he said. speaking in tallinn earlier on thursday, ardo hansson, who sits on the ecb<u+2019>s governing council as head of estonia<u+2019>s central bank,<u+00a0>didn<u+2019>t rule out that the u.s. election result could impact the ecb<u+2019>s policy deliberations in december. <u+201c>we need a little bit more time<u+201d> to assess the impact, mr.<u+00a0>hansson<u+00a0>said. <u+201c>we still have several weeks until december.<u+00a0>by that time we<u+2019>ll have a much clearer idea.<u+201d> the ecb is also expected to change the design of its bond-purchase program at its next policy meeting to ensure it doesn<u+2019>t run out of bonds to buy. under its current rules, the ecb buys mainly government bonds in proportion to the size of each eurozone economy. it can<u+2019>t buy more than 33% of most bond issues, or bonds yielding less than minus 0.4%. that excludes a large share of german government bonds. mr. weidmann cautioned against violating the program<u+2019>s <u+201c>red lines.<u+201d> <u+201c>it is decisive that the current government-bond purchase program doesn<u+2019>t envisage loss-sharing or introduce shared liability for government debt through the back door,<u+201d> he said. write to tom fairless at tom.fairless@wsj.com
bundesbank<u+2019>s weidmann urges calm after trump election  - wsj
tom fairless