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Central bankers should own up to the trade-offs in ultra-loose monetary policy

Their unorthodox experiment stimulated recovery but did it also exacerbate wealth inequality?

By Paul Wallace  

ECB President Mario Draghi. Photo: Arne Dedert/DPA/PA Images

ECB President Mario Draghi. Photo: Arne Dedert/DPA/PA

Central bankers are a conservative tribe but they have torn up the rulebook since the financial crisis a decade ago. They have pushed interest rates down to record lows, even into negative territory. And through quantitative easing they have bought bonds with newly created money on an epic scale. This has vexed savers who rely on interest from deposits rather than investments. There is widespread concern about the fairness of policies that have stoked asset prices.

These criticisms get short shrift in a recent discussion paper from the…

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