Making central banks serve the real economy

Central banks shall supply money for the economy by supplying money for banks. The paradox here is that they lack infuence on what banks do with the money. The problem with low key interest rates is that they are not targeted. Quantitative easing measures (QE), such as the purchases of securities by central banks, can help the "nancial sector in systematic liquidity and solvency problems. QE can also reduce government debt servicing costs by lowering the sky-high interest rates of state bonds. That has, for example, been the case with the European Central Bank’s bond-buying programme for struggling member states.

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