Central banks should buy assets other than government bonds, says Bank of England's Adam Posen Mr Posen, who will step down from his role in August, added that he was "too optimistic" when he abandoned a push for more stimulus in April. "Further asset purchases by central banks can improve the economic situation we are now in," Mr Posen said in a speech in London. He also said it is "time for the major central banks, including the Bank of England, to engage in purchases of assets other than government bonds." The BoE held its bond-purchase target at £325bn this month as policy makers kept a close eye on the crisis in the eurozone. Mr Posen, who until April voted to increase stimulus, said the global recovery had "petered out" and the "risk of disorder in the euro area has reinforced the trends towards excessive reluctance to invest." He added that his vote for no change to asset purchases in April and May "reflected my expectation that prior quantitative easing measures would be sufficient to give the British economy a good chance of returning to sustainable growth consistent with meeting the inflation target." "I was too optimistic about the other forces at work, including the impact of the" European Central Bank's long-term loans and the effectiveness of the BoE's QE program, Mr Posen said. He said further asset purchases by central banks "should take the form of private sector securities for the time being." "This will allow more direct targeting of financial sector dysfunctions, and greater impact on liquidity preferring investors" portfolios, thereby leading to greater impacts on confidence and on the real economy than a similar unit of QE on government bonds," he said.