Fed makes up for ECB's failures
Published 01/12/2011 | 10:43
Yesterday's co-ordinated campaign by the world's central banks to provide liquidity to banks demonstrates yet again just how abysmally the ECB has failed to do its job.
With the ever worsening euro crisis making banks terrified to lend to one another, the global interbank market, and with it large chunks of the world economy, was in serious danger of completely seizing up until the Federal Reserve and other major international central banks effectively ordered the ECB to join them in lending money to banks unable to borrow money from other banks.
Bravo the Fed, the Bank of England, the Bank of Canada and the Bank of Japan. By flooding the financial markets with virtually unlimited liquidity they have ensured that the dangerously deluded ECB, which continues to obsess about the non-existent dangers of inflation at a time when the real risk is that of a deflationary depression, doesn't blow up the international economy.