German Finance Minister Wolfgang Schäuble has indicated that Berlin is losing patience with the ECB’s approach to the economic slowdown, calling for banks to move away from loose monetary policy and increase rate hikes.
Schäuble, speaking at an event organised by a German economic think tank, said that, “there is a growing understanding that excessive liquidity has become more a cause than a solution to the problem.”
“I just said to [US Treasury secretary] Jack Lew that you should encourage the Federal Reserve and we should encourage the European Central Bank and the Bank of England in a concerted action, to carefully but slowly exit.”
The ECB has increased stimulus and lowered rates in the face of increasing economic uncertainty over the past few months, seeking to support the European economy. It has increased its €1.5 trillion stimulus twice since December, and even rolled out a series of rate cuts and cheap loans for banks in March. Such a high-profile figure in finance speaking out against these measures will certainly call ECB President Mario Draghi’s approach into question.
11/04/2016
