ECB's Weidmann says line between fiscal, monetary policies blurred

FRANKFURT (Reuters) - Government bond purchases and large scale liquidity provisions by the European Central Bank blur the line between fiscal and monetary policy, Bundesbank President Jens Weidmann said on Friday, noting a key concern with prevailing monetary policy.

"Our critical appraisal focuses on aspects of such liquidity provision where the boundary between monetary policy and fiscal policy is in danger of becoming blurred," said Weidmann, who also sits on the ECB's Governing Council.

"For example, when emergency liquidity assistance is granted on a very large scale, the collateral framework is severely watered down, or when government bonds are purchased," he added.

(Reporting by Balazs Koranyi; Editing by Maria Sheahan)