LINZ, Austria (Reuters) - The European Central Bank has begun talks about tightening policy and it would be reasonable to reduce the intensity of stimulus, Austrian central bank governor Ewald Nowotny said on Wednesday, adding that a decision was coming this autumn.
While the euro zone economy is gaining strength and the threat of deflation has gone, inflation remains far below the ECB's target of close to but below 2 percent, Nowotny, who sits on the ECB's rate setting Governing Council told a conference.
He added that negative interest rates were necessary for "a while" but warned that negative rates could distort markets, a potentially dangerous phenomenon.
(Reporting by Shadia Nasralla; writing by Balazs Koranyi; Editing by Gareth Jones)
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