25 May 2016 Is Germany to blame for the European mess? ......... ........................................................ ... bank credit for real economy investments has also been stagnating recently. This has been due firstly to the massive and disproportionate increase in bank regulation by the EU Commission and the ECB, which is crushing community banks due to sharply risen costs to manage the regulatory burdens; secondly, it has been due to the negative interest rate and flat yield curve policy of the ECB, which is good for the large, asset speculation-driven banks, but has drastically shrunk income of the majority of banks, which are small, local and normally lend for productive purposes, hence requiring a positive yield curve. They are getting hammered by the flat yield curve and the new ECB tax on banks called ‘negative interest rates’. These banks will get annihilated in the near term, if they do not follow the only avenue left to them by the ECB: a massive expansion in bank credit for non-GDP, namely property, transactions. ........................................
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