RBS's Davies: Lack of Good Mechanism to Combine Fiscal, Monetary Policy

The video discusses the challenges of negative interest rates, particularly their impact on bank profitability and the transmission mechanism between monetary policy and the real economy. It explores the concept of direct money, also known as helicopter money, as an alternative. However, it highlights the difficulties in implementing such a policy, including deciding the distribution of funds and the lack of a cohesive mechanism to integrate fiscal and monetary policy effectively.

What challenges are associated with implementing a new mechanism for distributing direct money?

Why is it important to find a sensible framework for injecting money into the economy?