Report
Driving up long-term interest rates to the level of the apparent interest rate on debt would be a sensible policy for the ECB
A more restrictive monetary policy by the ECB that, instead of lowering interest rates further, drove up long-term interest rates to the level of the apparent interest rate on debt , would have positive effects : As interest rates would not rise above the apparent interest rate, there would be no loss of solvency for governments, households or companies; The ECB would have more leeway to react in the event of a recession, as the repo rate would move towards 1.5%; The state of euro-zone banks would improve.
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Natixis
Based across the world’s leading financial centers, Natixis CIB Research offers an integrated view of the markets. The team provides support to inform Natixis clients’ investment and hedging decisions across all asset classes.
Patrick Artus
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