Folkerts-Landau: Monetary Policy Now Doing Serious Damage

The video discusses the challenges facing the global economy, including slow growth in Japan, issues in Europe, and a new UK government. It critiques central bank policies like QE and negative rates, suggesting they have reached their limits and are harming bank profitability. The discussion shifts to the need for fiscal policy to stimulate growth, highlighting the negative impact of current monetary policies on the financial sector, including banks and insurance companies.

What are some of the challenges mentioned in the global economy?

• Successful central bank policies

• Stable European banks

• High economic growth in Japan

• New government in the UK seeking growth

What unconventional measure is being considered due to the failure of central bank policies?

• Higher interest rates

• Increased taxes

• Helicopter money

• Reduction in government spending

What is the main issue with relying solely on monetary policy according to the discussion?

• It is more effective than fiscal policy

• It leads to inflation

• It has reached its limits and can be harmful

• It always benefits the financial sector

What is the suggested alternative to monetary policy when it becomes counterproductive?

• Higher interest rates

• Fiscal policy

• More aggressive monetary policy

• Increased regulation

How do negative interest rates affect the financial sector?

• They boost bank profitability

• They are beneficial for insurance companies

• They are detrimental to bank and insurance profitability

• They have no impact on the financial sector