The European Central Bank is drawing up plans for large-scale asset purchases in case they are needed but there remains some way to go before that point, one of bank’s policymakers said yesterday.

“The inflation and deflation risks are more or less level in EMU area which means that we do not see an imminent risk of deflation.

“However, we are ready to prepare for such a situation,” Yves Mersch, one of the ECB’s six executive board members said at conference organised by Clearstream.

On Thursday, the ECB opened the door to possibly turning on its money-printing presses to boost the eurozone economy and keep inflation from staying too low.

It kept interest rates steady at 0.25 per cent at its regular meeting, but ECB president Mario Draghi said the central bank had achieved unanimity that asset purchases, also known as quantitative easing, might be needed to tackle inflation if it proved persistently low.

Mersch said markets should not jump the gun and expect immediate action, stressing the ECB still had room to cut interest rates again.

“From the theoretical agreement to the implementation of the operations is still a long way,” Mersch added.

“The Governing Council said there is also unconventional instruments which means there is also conventional room for movement, and let me insist on that.”

He went on to detail a list of issues the ECB would have to iron out before it launched into any QE programme.

“The specificities relate to the existence and eligibility of different asset classes, both private sector and public sector. We have also looked into the legal side we have to operate in relation to our mandate.”

“We are not only preparing for these unconventional measures to address a tail risk but we speak more about this because of the inflation side.”

Mersch also said any purchases should be designed with the self-righting traits that many of current crisis measures have.

“I am a great admirer of the automatic exit clauses that were built into our liquidity providing facilities,” he said.