2023-09-18 10:45:34
Economist Paul De Grauwe (re)steps up to the plate: the ECB is right to raise its key rate in the face of inflation. But not to massively subsidize the banking sector, when it might easily avoid it. Article reserved for subscribers Journalist in the Economy department By Dominique Berns Published on 09/18/2023 at 12:45 Reading time: 2 min
Economist Paul De Grauwe, professor emeritus at KULeuven and teacher at the prestigious London School of Economics (London), rants following the new increase, announced last Thursday, in the key interest rate of the European Central Bank ( ECB). This so-called “deposit facility” rate, which remunerates commercial banks’ deposits with central banks, will now be 4%. The ECB, explains Paul De Grauwe, has created a money machine, where bankers win every time – and always more with each increase in the key rate. And that, without doing anything. The euro zone’s issuing body might very well lead the fight once morest inflation – which is its priority objective – without massively subsidizing the banking sector, he explains to Evening.
The ECB, you say, has set up a cash machine which enriches the banking sector. Is the amount at stake significant?
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