Professor Werner on QE and Central Banks

In the video below prof. Richard Werner explains how central banks actually work and why quantitative easing as it is currently pursued does not work. Werner further explains how QE could work and he recommends that banks should not be allowed to provide credit for financial speculation but that credit should primarily be given the small and medium-sized enterprises (SMEs).

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2 thoughts on “Professor Werner on QE and Central Banks”

  1. Exactly. In the U.S., the Federal Reserve provides a “discount window” allowing the big banks to borrow at extremely low rates which are unavailable to other business interests and organizations. This enables speculative investment behavior at little risk, and provides an unfair competitive advantage for Wall Street financial institutions.

    1. “Little risks” means that the ordinary citizens will pay (through the tax system) if such bank would collapse once an speculative bubble bursts. Anyway such policy is weird as financial transactions (such as stock trading) do not contribute to (real) economic growth.

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