ECB's Villeroy: monetary policy not omnipotent

Central bank policy is effective in the face of the current economic slowdown, but cannot alone solve problems created by politicians, ECB policymaker Francois Villeroy de Galhau said on Wednesday. Villeroy, who is also head of France's central bank, said that protectionist tensions from the United States and uncertainties over Britain's departure from the European Union were undermining business confidence.

"Faced with this situation, political leaders – and one of them in particular – have the most important role to play: it is up to them to restore the confidence they have undermined," Villeroy said in a speech at Paris' Sciences Po university. He did not specify which leader he had in mind.

"Non-standard policies have been effective; but they can also create the – mistaken – illusion that monetary policy is omnipotent," Villeroy said.