Mediocre Monetary Meddling

euroRather than using a cannon, last week the ECB used a popgun. By reducing the rate it charges banks on loans and by charging banks on deposits held at the central bank, the ECB hopes to spur lending. It won’t happen. Separately, it’s also finally injecting liquidity into the banking system. What these steps have done is give Europe time to be saved by… a strengthening recovery in the US.

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