18 Oct 2014

ECB's 'QE' Will Not Fix The Eurozone's Problems - Jens Weidmann

By Germany's Jens Weidmann has claimed that the European Central Bank's (ECB) plan to purchase asset-backed securities (ABS), a form of quantitative easing, will do little to help the ailing eurozone economy.
He insisted that the eurozone's economic stagnation was due to structural factors rather than monetary policy.
“The biggest bottleneck for growth in the euro area is not monetary policy, nor is it the lack of fiscal stimulus: it is the structural barriers that impede competition, innovation and productivity,” he said.
The Bundesbank president also warned that the ECB's plan would only serve to transfer risks from banks to the taxpayer.
“This would run counter to everything we have strived to achieve in banking regulation over the last years,” he said. 


Mr Weidmann also said that the ECB's Governing Council, of which he is a member, was more concerned about a prolonged period of low inflation rather than "broad-based deflation".
On Thursday the ECB gave its clearest indication yet that it intends to buy private securities when policy maker Ewald Nowotny said the purchases would start in December "at the earliest".
Although the ECB has refused to liken its ABS programme to quantitative easing, it will have a similar effect of increasing liquidity in the market.

Source 


ESM:THE SHOCKING TRUTH!

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