Facebook's Libra could undercut ECB's powers - Mersch

FILE PHOTO: Yves Mersch, Member of the Executive Board of the European Central Bank delivers a speech during Lamfalussy Lectures Conference in Budapest, Hungary, February 4, 2019. REUTERS/Bernadett Szabo/File Photo - Copyright BERNADETT SZABO(Reuters)

By Reuters

Published on 02/09/2019 - 10:34•Updated 25/04/2024 - 17:42

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FRANKFURT (Reuters) - Widespread acceptance of Facebook's <FB.O> proposed Libra currency could even undermine the European Central Bank's ability to set monetary policy, a potential risk for the currency bloc, ECB board member Yves Mersch said on Monday.

"Depending on Libra’s level of acceptance and on the referencing of the euro in its reserve basket, it could reduce the ECB’s control over the euro, impair the monetary policy transmission mechanism by affecting the liquidity position of euro area banks, and undermine the single currency’s international role, for instance by reducing demand for it," Mersch added.