“The additional losses of savers are negligible”
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Isabel Schnabel is the director of the European Central Bank
Source: pa / dpa / Bernd von Jutrczenka
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German director of the European Central Bank, Isabel Schnabel, defends the bond purchase program in the pandemic. This has led to additional losses for savers. But according to Schnabel, the alternative would have been even more expensive.
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Dhe German director of the European Central Bank (ECB), Isabel Schnabel, defends the central bank’s PEPP bond purchase program in the corona pandemic. “The PEPP is the ECB’s answer to the worst economic crisis in the post-war period. Without the courageous measures, we would probably be in the midst of a severe financial crisis today, ”Schnabel wrote in a guest post for WELT AM SONNTAG. “The benefits of our monetary policy measures clearly outweigh their costs.”
The former Bonn economy also speaks to savers. They would have suffered much higher losses if the ECB had cut key interest rates significantly further, instead of buying bonds. “ECB studies show that we would have had to lower the key interest rate to around minus 1.7 percent – from the current minus 0.5 percent – in order to achieve the same estimated effect on inflation as with the additional bond purchases,” writes Schnabel. “The savers’ associated losses have almost matched those of the past six years. The additional losses of savers through our new bond purchases are negligible. ”
