Miguel Carrión Profile picture
Eurozone banking, finance and macroeconomics for @Eurobriefing, @FuncasES and @ElDiarioES
6 May 20
The real problem with ECB QE is that it doesn't work as advertised. In order for asset purchases to raise inflation you need a combination of (speaking simply) the quantity theory of money, the multiplier model of bank lending, and loanable funds, all of which are bunk. 1/-
In my opinion the real reason why the ECB needed QE was that in 2014 banks were signalling virtue by repaying TLTROs early, thereby draining themselves of reserve which was showing in erratic eonia rates 2/-
Even under a regime of unlimited liquidity (against good collateral) in ECB refinancing operations, the ECB cannot force banks to borrow if they don't want to 3/-
Read 9 tweets
10 Apr 20
The Eurogroup are masters of the press release. The output of yesterday's meeting has 23 points, the first 3 of which are "whereases", the next 8 stuff already done, often by other institutions, and the last one says "will pursue the work needed" 1/- consilium.europa.eu/en/press/press…
point 12: we're ready to step up, waffle waffle 2/- 🧇🧇🧇
point 13: we welcome the Commission’s proposals regarding the further temporary flexibility in the use of EU funds...

welcoming something they have no power to stop, waffle waffle 3/- 🧇🧇🧇
Read 28 tweets
14 Mar 20
Cada medida ... supone un coste importante y difícil de prever, ... nadie sabe cuánto durará la crisis. Calviño representa la parte ... ortodoxa y cercana a las empresas y siempre ha tenido choques con otros ministros ..., no solo con los de Unidas Podemos elpais.com/espana/2020-03…
El pacto de estabilidad y crecimiento va a terminar siendo el pacto de crecimiento de las infecciones y de la estabilidad de los cementerios
El estado, mal que les pese a algunos, es el asegurador de último recurso. Y para eso sirve el monopolio de la emisión de moneda: para movilizar los recursos reales de un país.
Read 11 tweets
31 May 19
Pro tip: the Federal Funds Rate is not the cost of capital ft.com/content/46c4b1… “'How can slightly less than a dozen people meeting eight times a year decide what the cost of capital should be versus some kind of organically, market supply determined rate?' Ms Shelton said."
Pro tip: the central bank's most basic mission is to ensure the payment clearing system functions. Setting interest rates is a side effect of it. ft.com/content/46c4b1… "If appointed to the board, she would be “asking tough questions” about its most basic mission, she said." 2/-
She doesn't want the Fed to turn banks into utilities. They are utilities. She wants the banks to lend reserves instead of the Fed paying interest on reserves. Banks don't lend reserves. 3/-
Read 10 tweets