ECB, Lagarde's secret move. European banks rejoice
There ECB in recent years he has accomplished a strategic move passed over in silence, it is a record subsidy intended for banks. Thus, Frankfurt's monetary tightening caused the remuneration of the institutions' reserves to skyrocket. The ECB – we read in Il Fatto Quotidiano – has created a large supply of reserves making it grow bank deposits from 500 billion in 2015 to 4.3 trillion in 2021. This happened simply by “creating” liquidity and purchasing securities from the banks which thus found themselves flooded with reserves which until a few years ago gave zero interest. Now the monetary authority has decided to remunerate these trillions of euros at 4%. which he created from nothing in the past years.
The banks – continues Il Fatto – they thus obtain a completely risk-free return, qualities that the securities purchased often did not share, which also offered lower average returns. We can therefore say – as stated by the two economists who have dealt most with this matter in recent months, Paul DeGrauwe and Yuemei Ji – which is what is happening an immense public subsidy to the banking sector. A gift of 140 billion in 2023 alone, ending in bonuses and dividends. Among the most awarded – concludes Il Fatto – there are France And Germanybonuses obtained without any public debate.
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