# Fragmentation

- Canonical URL: https://www.gerhardmerk.de/fragmentation
- Post ID: 589837
- Modified: 2023-07-25T21:01:33+00:00
- Language: en

## Definition

In the context of the ECB's monetary policy, the fact that the key interest rate set by the central bank for the currency area as a whole by no means leads to the same price for loans in all individual member states. In fact, the interest rate for comparable loans in Italy and Spain is currently (early summer 2013) three times higher than in Germany or the Netherlands. This is because banks in Italy and Spain distrust domestic companies and therefore calculate a higher default risk. - However, this also clearly shows that the central bank's low interest rate policy does not by itself lead to more investment in the desired place, as many textbooks claim. - See transmission mechanism, monetary, interest rate pass-through. Attention: The financial encyclopedia is protected by copyright and may only be used for private purposes without express consent! University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec. Professor Dr. Eckehard Krah, Dipl.rer.pol. E-mail address: info@ekrah.com https://de.wikipedia.org/wiki/Gerhard_Ernst_Merk https://www.jung-stilling-gesellschaft.de/merk/ https://www.gerhardmerk.de/

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