The European Central Bank (ECB) Executive Board Member Yves Mersch said in Frankfurt on Monday that the recent increase in government bond yields in Europe reflects desirable outcomes such as an increase in inflation expectations and increased optimism about economic growth.

"Rising rates either mean that inflation expectations rise or that growth expectations rise. We like both," Mersch noted.

The ECB executive board member added that the central bank cannot set prices in financial markets.

"When markets have gotten on the wrong track we're not in charge of stopping them. When the markets correct, it's a correction. In that case you can't tell the central bank that it should have prevented it," Mersch said.