Is QE the solution to all the problems in the euro area?
Unconventional monetary policy is like steroids. Their use in small doses can be very effective, while long-term use weakens the bones. Likewise, the negative interest rates may damage the banking system. Instead of stimulating lending, the ECB deposit rate cut, and the restart of the QE will be a disaster for the European banks, which are already challenged. That is the case when the cure may cause more harm than the illness itself. The concerns about a recession in the euro-area press the EUR/USD down.
The continuous euro…
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