Constâncio and Issing fear ‘zombie' bank dependency on central bank liquidity
Monetary policy is over-burdened with maintaining price stability, providing adequate liquidity to the banking sector and, in the US, maintaining low unemployment, according to European Central Bank (ECB) vice-president Vítor Constâncio.
Taking part in a panel discussion on the linkages between monetary policy and liquidity in Frankfurt, Constâncio added that macro-prudential policies – enhanced by institutional changes in the wake of the crisis – "must therefore be tried in a serious way".
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