ROME, Jan 22 (Reuters) - European Central Bank Executive Board Member Lorenzo Bini Smaghi warned in a newspaper interview that it would be risky and unjustified at present for the ECB to take interest rates close to zero.
Bini Smaghi told the Wall Street Journal that cutting rates close to zero should only be done if a central bank sees a substantial risk of deflation, something that is not the case for the euro zone.
"I think we should not go into a territory in which real interest rates are substantially negative, because we have seen that this creates huge distortions in the economy and it's very difficult to reverse these distortions," he said.
The interview was conducted on Wednesday and posted on the WSJ website on Thursday .
The central banker said taking nominal rates to zero could not be excluded, but only under an "extreme situation," which the ECB does not currently see. (Reporting by Gavin Jones; Editing by James Dalgleish)