MILAN - The European Central Bank can proceed "with the due caution" in tightening its monetary policy given that short-term inflation expectations dropped sharply and longer-term ones remain under control, a top policymaker said on Saturday.

ECB Governing Council member Ignazio Visco, who is also the Bank of Italy's governor, warned that an excessive tightening would have "serious implications" for economic activity and financial stability.

He reiterated that he saw this as a risk that carried the same weight as the danger of a too gradual tightening.

The ECB this week raised its key rate by 50 basis points and said it would replicate the move in March.

"The policy tightening can now continue with the due caution, carefully assessing the implications for the economy and inflation prospects of the measures that have already been adopted," Visco told the annual conference of Italy's Assiom-Forex financial markets association.

(Reporting by Valentina Za and Andrea Mandala Editing by Keith Weir)