There's again turbulence in the #ECB. The resignation of S. Lautenschläger, a senior German member, was a shock to many.
However, behind her departure is a long list of bad policy decisions. 1/
@CNBCJulianna @oliviabvoz @CNBCJou @Amdalleq @DiMartinoBooth
That list starts from the 'Outright Monetary Transactions' (OMT) program, the #ECB launched to bring down the borrowing costs of countries during the 2011/2012 debt crisis.
In this M. Draghi succeeded 👇, but the price was steep. 2/
Many don't know, but the "zombification" of the European economy started from the OMT program.
This recent article documents that the OMT program enacted zombie lending.👇
So, the price of rescuing the #Eurozone was an economic decay. 3/
Things got materially worse, when the #ECB enacted negative interest rates in June, 2014.
Slowly but surely they started to erode the European banking sector, which has been in a bad shape since the 2008 crisis.
Recently, banks have hit back 👇. 4/
To "seal the deal", the #ECB started its asset purchase (QE) program in March 2015.
It pushed sovereign bond yields to unnatural lows: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2933567 …
And further eroded the banking sector by pushing them towards riskier lending.👇5/
Our banks are teetering, capital markets are in a bubble, zombie corporations are abound and #recession looms.
The #ECB has effectively destroyed the economy of the #Eurozone and left no ammo for the impending #recession. 6/
So, is it really a surprise that, as last stand against the destructive policies of the #ECB, one of it senior member resigns?
No, because the ECB has become the biggest risk to economic and financial stability in the #Eurozone. 7/
We just have to hope that someone will stop this money conjuring madness before it also destroys our monetary system.
Our judicial system (ECJ) has become a joke by allowing the ECB to (effectively) break the Article 123 of the TFEU with its QE. 👇 8/
Our hope now lies with the German Constitutional Court and/or some brave politicians, who would have the courage to rally against the #ECB madness to save what's left of our economy.
In any case, the situation is dire. 👇/end
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