Rather than writeoff bad loans at European banks, the ECB has chosen the bury theirr head in the sand, extend-and-pretend path of Japan.
This is despite the fact the Japanese plan has taken multiple decades without producing meaningful results.
"More Room For Rate Cuts"
For example, ECB Executive Board member Benoit Coeure says "ECB Can Cut Rates Further, Offer Liquidity".
The European Central Bank can trim interest rates further and provide the banking system with liquidity, ECB Executive Board member Benoit Coeure said on Saturday after last week's rate cut to a record low.
"We can still cut interest rates if needed, and as we said clearly last Thursday we can provide liquidity to the euro zone financial system if needed to ensure they don't have problems refinancing," he said on France Inter radio.
"All that's possible, but what counts is that the banks transmit the decrease in the cost of refinancing to the economy," he said.
What Good Can Additional Rate Cuts Do?
Let's be realistic. The ECB's lending rate is .25%.
Although the ECB can cut rates 25 more times, 1 basis point at a time, the idea that such a move can produce anything meaningful is ridiculous.
Japan made similar moves multiple times, cutting rates a few basis points at a time. It served no purpose other than to let the Bank of Japan say "we are acting." The BOJ never once added the truth "but it's meaningless."
Now Benoit Coeure makes the same useless statement, also without adding "rate cuts cannot do a damn thing for Europe".Don't forget to Like Freedom Outpost on Facebook, Google Plus, & Twitter. You can also get Freedom Outpost delivered to your Amazon Kindle device here.