Categories: Europe

No Automatic Loans in Europe

Euro bills

No Automatic Loans in Europe (Reuters)

Jens Weidmann, head of Germany’s Bundesbank and member of the Governing Council of the European Central Bank (ECB), does not believe the ECB immediately should offer long-term loans to European banks. This summer saw a rise in interest rates, in anticipation of the Fed tapering its current easy-money policies. However, interest rates have fallen back since the Fed is continuing its bond buying program at previously announced levels. “Under no circumstances should one try to replace the long-term capital market financing of banks with long-term refinancing operations (LTROs) or other monetary policy measures,” said Weidmann.

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