Speaking to a European parliament committee on Monday as part of her vetting, Lautenschlaeger said economic data from the euro zone suggested "we have seen the trough in economic activity, even in the member states hit hardest by the crisis."

"A period of prolonged monetary policy accommodation with interest rates being low for a long period is not without its risks," she added.

"In fact low interest rates may be associated with spurring asset price bubbles", she told the committee in Strasbourg.

Lautenschlaeger, who made her name as a banking supervision expert, is the only candidate to succeed Joerg Asmussen, who left the ECB two years into his eight-year term to rejoin the German government as state secretary in the labour ministry.

The EU parliament is due to decide on Thursday whether to back Lautenschlaeger and the European Council will then have the last word.

(Reporting by Eva Taylor and Paul Carrel; Editing by Mike Collett-White)