FRANKFURT, June 8 (Reuters) - The European Central Bank can and will exit quickly from policies providing extra liquidity when the economy rebounds, ECB Governing Council member Axel Weber said on Monday.
"The liquidity policy crisis measures taken thus far still enable us to exit from the policy of ample liquidity injection quite easily," Weber, who also heads the German Bundesbank, said in the text of a speech to be given at a Bank of France/Bundesbank conference.
Since October the ECB has been providing unlimited liquidity to banks and slashed interest rates from 4.25 percent to a record low of 1 percent. It has also announced plans to buy by 60 billion euros of covered bonds to supports bank lending.
"Should the overall economic picture improve, the Eurosystem will absorb the extra liquidity provided as quickly as possible," Weber said.
This would enable the ECB to counter potential inflation risks early on and contribute to avoiding future financial crises, he said.
He also advocated looking more carefully at credit aggregates to dampen boom-and-bust economic cycles.
Weber also said the worst of the recession might be past, but warned against expecting a quick recovery.
"Despite growing signs that the intensity of the downturn is subsiding, past experience has shown that the economy is generally very slow to recover from recessions that are associated with real estate and financial crises," Weber said.
"The crisis is likely to put a strain on global financial markets and the real sector for some time to come."
Euro-zone gross domestic product (GDP) fell 2.5 percent in the first quarter from the previous one, but more recently there has been an uptick in business expectations, in what some see as a sign the economy has gone past the worst of the recession.
Weber made no reference to current interest rates in his speech.
The ECB kept its interest rates on hold at 1 percent last week, and analysts expect its easing cycle has come to an end after 325 basis points in cuts since October. [ECB/INT] (Reporting by Sakari Suoninen; Editing by Toby Chopra)