With regard to the ECB’s outright monetary policy operations – the OMT program: the purchase of government bonds of weakening EMU members in order to support them: this undermines the disciplinary pressure of the market, which compels balanced budget management – expression coined at the hearing before the German Federal Constitutional Court in June 2013. – The principle of the market economy should also apply to all central bank measures, namely that the incentive and sanction forces are not impaired but strengthened. A bank that takes risks in order to generate a profit must also be responsible for any losses. If the investors are unwilling or unable to do so, the institution must be wound up. It is not acceptable that the central bank artificially keeps these zombie banks alive and/or that taxpayers have to assume liability. – See presumption, central banking, buyouts, central banking, bailout, balance sheet adjustment, European Monetary Union, fundamental error, ECB collateral, ECB sin, Friedman thesis, last-resort provision, repression, financial, creditor priority, bailout Europeans, bailout routine, risk taker, final, shadow state, secondary market, haircut, supergovernment, redistribution, central bank induced, contract compliance, asset levy, competitiveness. – Cf. ECB Monthly Bulletin, May 2014, pp. 87 et seq. (effects of the ECB’s purchase programs; overviews; references).
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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
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https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk
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