Germany's monetary doyen slams ECB's 'shocking' balance sheet Jurgen Stark, the ECB's former chief economist and Germany's board member until two months ago, said the blitz of lending had corrupted collateral standards and risked inflation. "The balance sheet of the euro system isn't just gigantic in size but also shocking in quality," he said. Unlimited lending to banks for three years has pushed the ECB's balance sheet to over €3 trillion (£2.5 trillion), overtaking the US Federal Reserve to become the world's most activist bank. The attack come days after Bundesbank chief Jens Weidmann complained that the ECB's payments system known as Target2 had caused the Bundesbank to build up €547bn of claims on the rest of the system, mostly from the central banks of Greece, Ireland, Italy, and France. He demanded measures to protect German interests. Mr Draghi deflected the criticism gently on Thursday, insisting that there was no plot to unleash reflationary policies. "Nobody is isolated in the Governing Council and especially the Bundesbank is not isolated," he said. However, the open clash with the eurozone's dominant power and the custodian of monetary orthodoxy puts Mr Draghi in an invidious position. There are strong suspicions in Germany that the ECB is falling under the control of a Latin bloc with lax views on inflation. The dispute has become neuralgic because Germany has the lowest unemployment in 20 years and needs much tighter policies than southern states in deep recession. The ECB said inflation this year may reach 2.4pc on higher fuel costs, while growth will be lower. The eurozone will expand by just 0.1pc in 2012. Mr Draghi said the lending blitz known as LTRO's had been an "unquestionable success," staving off a serious credit crunch. He dismissed worries about lax collateral rules as "vastly overblown."