Luxembourg paper busts myth of money ‘parked’ with central banks
Working paper finds ‘no immediate link’ between deposits and credit activity
A working paper, published by the Central Bank of Luxembourg, seeks to bust the myth that an increase in "money parked with the Eurosystem" reflects a "stagnation, if not a reduction" in the provision of credit to the real economy.
In The Eurosystem, the banking sector and the money market, Paul Mercier finds "no immediate link" between the size of the European Central Bank's balance sheet and the credit activity of the European banks.
"The increase of the deposit facility does not provide
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