ECB chief economist and former Bundesbanker Jurgen Stark says the financial crisis won’t be solved by rate cuts and that excessively low rates can be problematic. He does allow that inflation will not be a problem in the medium-term. Considering his boss announced Thursday that inflation will be below target for the next two years, that’s the understatement of the year.
Also working overtime this weekend is ECB managing board member Bini-Smaghi. He says a deficit of trust is hampering the impact of lowered interest rates.
