Tuesday, May 1, 2012

The rise in the Eurozone money supply has not improved credit conditions

With the second round of the LTRO program, the ECB has managed to slightly improve liquidity in the Eurozone. This is evidenced by the growth in M3, the broad money stock. But as discussed before, this liquidity is not translating into area-wide improvements in the overall credit conditions. In fact the trend in lending to the private sector has completely diverged from M3.

Eurozone M3 vs loans to the private sector (source: GS)



SoberLook.com
Related Posts Plugin for WordPress, Blogger...
Bookmark this post:
Share on StockTwits
Scoop.it

*** Please help keep Sober Look going by viewing the following messages from our sponsor: