Monday 5 December 2016

Option of ECB gifting cash to citizens cannot be ruled out

Published 20/03/2016 | 02:30

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There is been a lot of talk that the ECB is running out of ammunition in its attempts to stimulate the eurozone economy and thereby bring inflation closer to the target it is mandated to achieve (of just under 2pc annually). This talk is entirely wrong.

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It is not much of an exaggeration to say that any central bank which presides over a paper money system ultimately only runs out of options when the world runs out of paper on which it can print bank notes. We are - very clearly - light years from that position in Europe now.

Thus far, the ECB's unconventional measures - from cheap, long-term lending to quantitative easing (QE) - have focused on stimulating the economy via the financial system.

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