Rising public debt and the rapid expansion of non-bank finance could curb the European Central Bank's ability to set the appropriate monetary policy, ECB board member Isabel Schnabel said on Thursday. The ECB is now raising interest rates to combat excessive inflation, fostering worries that higher debt costs could make some budgets unsustainable, particularly for vulnerable France, curbing the ECB's ability to set the appropriate monetary policy out of fear it sets off financial instability.