ArchivesEuro areaInterest Rates
Policy Transmission Mechanism: Broken in Italy, Better in Spain
Yesterday, the Financial Times reported that borrowing costs for small businesses in the periphery were rising relative to the core using the ECB’s release of July MFI interest rate data. I highlighted this point exactly on August 1 following Draghi’s now famous London speech, where he cautioned that monetary transmission mechanism is ‘hampered’. As opposed ... Read more
ArchivesBanksECBEuro areaInterest RatesMarket Pricing
Evidence of Hampered Monetary Policy Transmission Channel in the Euro Area
Mario Draghi cautioned on the ‘hampered’ transmission channel of monetary policy in his now famous London speech last week: To the extent that the size of these sovereign premia hampers the functioning of the monetary policy transmission channel, they come within our mandate. I referred to the clogging of rates policy back in April via ... Read more