Response to Corona-crisis: The ECB can increase your impact

an all-clear for John Greenwood, chief economist of the American investment company Invesco, in the Corona-crisis, not a cause. "First of all, it is a health c

Response to Corona-crisis: The ECB can increase your impact

an all-clear for John Greenwood, chief economist of the American investment company Invesco, in the Corona-crisis, not a cause. "First of all, it is a health crisis, the solution of which has the highest priority," says the Brit, who is a member of the shadow Cabinet of the Bank of England, in an interview with the F. A. Z. the measures taken by The governments and Central banks serve, in his view, as a bridge in the Phase, which connects to the pandemic.

Mark Fehr

editor in the economy.

F. A. Z.

The governments and Central banks have responded to the Corona-crisis. Remarkably, the pace of decision-making and the volume of programmes in Europe, the United Kingdom and the United States. "The problems will occur if the economy returns to a more normal state" expected Greenwood. He wishes for a better on the actual difficulties of tailored support.

Particularly affected the tourism, Hotel and accommodation sector, gastronomy, and cultural events remained. Countries that depend on these sectors is more likely to fall according to his words, the rest heavier than economies with a high share of manufacturing.

drama, art and music remain vulnerable

According to state programs, such as continued payment of wages of employees would have to be adapted. "In these sectors, I expect the highest income losses and insolvencies," says Invesco chief economist. Theater, art, and music remained very susceptible to the further development of the pandemic. Here, special measures are required less for Restaurants that could host less people and, therefore, loss of revenue suffered, but after all, already were allowed to open.

The Central banks have over-stretched for Greenwood, with the current crisis, measures their mandate in no way. It was their task, in a crisis, to provide liquidity. Your Balance sheet amounts were increased to record levels. Was going to let some fear, it could of these traps in the future harder, its role as a lender of last resort to exercise. "But I don't see this Problem, because the bond purchases and other measures, with which the supply of credit to the economy is secured, will serve to prevent major Stress."

Central banks balance sheets have to shrink again

Greenwood on the need for the Central banks must at some point begin to shrink their balance sheets looks the same. Recently, the new Governor of the Bank of England, Andrew Bailey made his announcement caused a stir, to plan in the context of a subsequent normalisation of monetary policy in the disposal infrastructures of merged government bonds before the interest rate will be increased.

Updated Date: 05 July 2020, 16:20

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