The ECB actions will be enough, but what matters now is the common fiscal policy
My interview in La Stampa is here...
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What impact does the ECB’s quantitative easing policy have on bank profitability?
Quantitative easing (QE) affects banks’ profitability in three main ways. First, as QE drives up bond prices, banks holding such bonds see their balance sheets strengthened. Second, QE reduces long-term yields and thereb...
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Central banks: from omnipotence to impotence?
Like the price of financial assets, the market assessment of the capacity of central banks to achieve their price stability objective fluctuates between omnipotence and impotence. We do not agree with this binary view of...
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Schriftliche Stellungnahme Bundestagsanhörung „Niedrigzinspolitik der EZB“
This Policy Contribution was prepared for the Financial Committee of the German Bundestag. It is only available in German. Zusammenfassung Reale Renditen fallen weltweit mindestens seit Anfang der 1980er Jahre, so auch i...
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The ECB has fired its bazooka
The ECB announced today an expansion of its asset purchases, to include securities issued by European agencies and institutions, as well as central government in the euro area. Purchases are intended to be continued unti...
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The ECB’s bond-purchase dilemma
German opposition to government-bond purchases by the European Central Bank is solidifying ahead of the programme’s likely announcement on January 22. Elections in Greece that could bring a government that will seek to n...
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Die EZB ist verpflichtet, ihr Mandat zu erfüllen
Die Europäische Zentralbank (EZB) wird wohl am 22. Januar ein Ankaufprogramm für Staatsanleihen ankündigen. Die Sorgen über die Auswirkungen und die Effektivität des Programms sind groß. Die EZB muss vorsichtig die Koste...
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Sovereign QE and national central banks
Inflation continues to fall. The first outright deflation numbers since 2009 have been recorded and inflation expectations are clearly dis-anchored. Inflation and inflation expectations are now clearly below the 1.7 to 1...
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Lessons from the Bank of Japan for the euro area
The decision of the Bank of Japan end of October 2014 to significantly expand its asset-buying programme came as a surprise. The yen weakened and stock markets rallied. The decision taken with only a small majority by th...
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Addressing weak inflation: The ECB’s shopping list
In this blogpost, we summarize our recently published paper, in which we discuss in detail the dilemmas for the ECB and the need to act. Inflation forecasts by the ECB have fallen substantially below the two percent thre...
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