A research paper by International Monetary Fund staff issued last month emerged an idea that policymakers might consider a 2 percent hike in inflation target chosen by many central banks, taking it to 4 percent.

Paul Volcker, White House economic adviser, posted in a German newspaper interview published on Monday that the speculation made by IMF economists that central banks could hike their inflation targets is nonsense. "It is a challenge but the euro countries will be ready for it".

Turning to the U. S. financial sector, Volcker quoted that U. S. banks were still not stabilized.

"The repair work is still running. It has just begun", he added.

Known for vanquishing stagflation during the Carter and Reagan administrations, the 6-foot-7-inch Volcker commands deep bipartisan respect.

In January, President Barack Obama made markets reverberated with shock waves with a three-part proposal tagged as "the Volcker rule", to cut banks' proprietary trading, get them out of the hedge fund and private equity business, and limit their future growth through a new market share cap.

"I wouldn't say copy. We should reach a joint agreement on what the appropriate solutions are", he posted when questioned if Europe should follow his proposals as well.