Bundesbank’s Weidmann says we’re in a very uncomfortable position as a central bank

Author: Ryan Littlestone | Category: Central Banks
  • Cannot use same formulas that were used in Japan and elsewhere
  • Treaties rule out a mutualisation of risks
  • We have a monetary policy which is too expansive for Germany (you also have a large surplus that you could put to good use but won’t chum)
  • Monetary policy is expansive and rightly so
  • Discussion over unconventional policies is difficult
  • Disagrees that monetary policy has no tools left
  • Lower interest rates can result in lower willingness to make structural reforms
  • Governments have to take long arduous reform path
  • Oil driven inflation very different to wage driven inflation

I get the feeling that tensions are rising within the ECB and they’re going to really start spilling out into the public domain.

Adam had a fantastic post up last night on how close the battle to push through QE might be

Weidmann is speaking at the Zeit economic forum in Frankfurt

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