Europe's Quiet Aggression Could Pay Off - - by Simon Nixon
Europe's Quiet Aggression Could Pay Off - by Simon Nixon
When is quantitative easing not quantitative easing? When it is a European Central Bank liquidity operation. On Wednesday, a record €442 billion ($622 billion) of one-year funds was pumped into the European banking system, answering critics who say the ECB isn't doing enough to fight the crisis. True, the ECB isn't increasing the quantity of money in circulation in the same way as the Federal Reserve and Bank of England, which are buying assets outright. But providing unlimited liquidity to banks is designed to achieve a similar goal. Since the crisis began, the ECB has expanded its balance sheet as aggressively as the Fed or the BOE.
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