Financial Times on Nostr: US High School Economics class: ECB to rely more on bank lending as it shrinks ...
US High School Economics class: ECB to rely more on bank lending as it shrinks balance sheet
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The European Central Bank (ECB) is moving away from its reliance on asset purchases as it shrinks its balance sheet. Instead, the ECB is looking to implement new tools, such as bank lending, to implement monetary policy. The ECB's new approach involves the use of a corridor, with a floor and a ceiling. The floor represents the interest rate on deposits, while the ceiling represents the interest rate on loans. The ECB's actions affect the corridor by adjusting the interest rates. This approach differs from the approaches of the US Federal Reserve and the Bank of England.
#EuropeanCentralBank #MonetaryPolicy #BankLending #BalanceSheet #InterestRates
https://www.ft.com/content/d9b713a5-d5fb-4cc3-a3f0-eab6d03b49a8
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The European Central Bank (ECB) is moving away from its reliance on asset purchases as it shrinks its balance sheet. Instead, the ECB is looking to implement new tools, such as bank lending, to implement monetary policy. The ECB's new approach involves the use of a corridor, with a floor and a ceiling. The floor represents the interest rate on deposits, while the ceiling represents the interest rate on loans. The ECB's actions affect the corridor by adjusting the interest rates. This approach differs from the approaches of the US Federal Reserve and the Bank of England.
#EuropeanCentralBank #MonetaryPolicy #BankLending #BalanceSheet #InterestRates
https://www.ft.com/content/d9b713a5-d5fb-4cc3-a3f0-eab6d03b49a8