More of What Doesn’t Work ??
General expectations in the markets are that the ECB will reduce interest rates again next week in an attempt to get economic activity back on track. Well, just minutes ago one sane person stepped to the plate: (from Yahoo news)
“A top European Central Bank official warned Thursday that another interest rate cut might not be much help for eurozone countries in recession — because already low rates are not getting through to businesses and consumers.
Joerg Asmussen, the bank’s top official for international relations, said that the “pass-through of rate cuts” would be “limited” since troubled banks are not able to send them on. Meanwhile, he cautioned that ultra-low interest rates can take pressure off governments and banks to fix their troubles.”