Suite à la récente crise financière, il est « peu probable » que la BCE baisse ses taux d’intérêt en septembre. En effet, il se peut que les taux soient « longtemps » maintenus à 4 %, explique un article du 27 août publié dans EuroIntelligence.
EuroIntelligence believe that the argument in favour of the ECB deciding to ‘wait and see’ before acting is « overwhelming » for three main reasons:
- The eventual extent of the credit crisis remains « unclear » and is not « fundamentally » a subprime crisis, but a credit market bust. Neither is it a US crisis, but rather a global one.
- The credit crisis may affect the demand for money, and if so, interest rates will « almost certainly » be reduced. However, should it remain confined to the financial sector, its effect on the real economy will be « limited ».
- There are « signs of a mild economic downturn » in the euro area.
Financial institutions in the US and Germany have been most affected so far, but « serious turbulence » should also be expected in China, argues the article – claiming that the crisis will take « months », possibly « much longer », to unwind.
EuroIntelligence believe that interest rates may have « peaked » at 4%, but that the short-term interest corridor will be « narrow » with an « extremely cautious » ECB strategy for the way down, with rates unlikely to settle at 2% or even 3%.
The article argues that this crisis is largely « Alan Greenspan’s legacy », and assumes that Ben Bernake will be just as « irresponsible ». It recommends that Europe should not follow the policy of a « discredited » Federal Reserve.
EuroIntelligence believe that the most important policy lessons of the crisis are:
- Monetary policy should seek to maintain a high degree of monetary and financial stability.
- Direct inflation targeting should be abandoned in favour of a broader base that includes an analysis of monetary and credit conditions.
- Do not bail out every bank. Certain actors must be « penalised » to avoid a repeat of the crisis.
- Central banks are « wrong to accept CDO tranches » as collateral as the Federal Reserve did. Extending the collateral base is « insane » as it rewards the highest risk-takers.
- Global credit flows should be regulated, including hedge funds. Self-regulation should not be « ruled out », and a global credit register is an idea « worth studying ».
- The European banking sector should be « consolidated ».
The article concludes that there is a lot to be done, most of which « is little more than a return to time-honoured central banking practices ». The crisis will be « more severe » than markets have shown thus far and the ECB is « right » to be « cautious », it adds.