What the ECB is doing now is dangerous - Natixis

Patrick Artus, Research Analyst at Natixis, points out that the ECB has maintained a very expansionary monetary policy at a time the euro-zone economy has been improving markedly.

Key Quotes

“ We believe what the ECB is doing now is dangerous, since:

- If wages do not react to the fall in unemployment, there is no point in stimulating demand for goods and services to restore inflation;

- The bond bubble continues to inflate, and a bond bubble is as dangerous as other bubbles;

- Risk premia no longer reflect the reality of the risk, which poses the threat of a crisis among investors in the future;

- The very expansionary monetary policy weakens banks;

- The ECB is not creating any leeway to act in the event of a negative shock in the future.”