Main Content

Ifo President Sinn sees no effect in rate cut and criticizes bond purchases by ECB

Sep 4, 2014

For Ifo President Hans-Werner Sinn, the European Central Bank’s surprising interest-rate cuts from 0.15 percent to 0.05 percent will have no effect.

“The ECB used up its ammunition much too early and cut interest rates by too much. Now it is in a liquidity trap. At this point, there is not much it can do”, he said on Thursday. “Unfortunately, this also indicates the purchase of bonds by the ECB. In so doing, it would take on the investment risk of investors, which the ECB is not authorised to do as this is a fiscal and not a monetary policy measure. Such a policy would be at the expense of European taxpayers, who would have to pay for the losses incurred by the ECB.”

Press contact

Harald Schultz

Ifo Institute
Press, Publications, Conferences
Phone: +49(0)89/9224-1218
Fax: +49(0)89/9224-1267
Email: schultz @

Short URL: