Banking Sector

Low Interest Rates

13 Feb: Behaving responsibly in a low interest rate environment – a central banker’s perspective

The growth trend has been declining in many mature economies not just since the crisis, but for several decades. This slowdown in growth has led to lower long-term interest rates. The structural causes of this trend of slowing growth is a subject of controversy among specialists. Demographic and technological developments are mentioned, as are the effects of the financial cycle, which may be out of sync with the business cycles. I do not want to pre-empt this ongoing discussion. Instead, I would like to focus on two issues, which in the current context are very relevant from a monetary policy perspective – regardless of the structural causes underlying the weak economic growth.

Banking Sector Italy

26 Oct: Italy’s banking sector staring into the abyss

The financial sector is on the brink of collapse. The country that probably gave the English-speaking world the word for bank – medieval Italian merchants traded with each other on a bench known as banca – has a €360bn problem in its fragmented banking sector. This is the amount of non-performing loans, loans on which customer’s repayments have fallen behind.