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MONETARY POLICY AND THE PRODUCTIVE ECONOMY IN THE EUROZONE
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issue lies in the question mark hanging over the
effectiveness of the monetary expansion. In
other words, the extent to which, with stricter
management, similar results could have been
achieved with a substantially lower monetary
effort, or whether –the other way round– sub-
stantially better results could have been achieved
with the same monetary expansion effort.
As we can see, the virtual absence of oversight
and responsibility over the contributions of
resources to the banking system makes it impossi-
ble to accurately quantify what is going on. Yet
there certainly are sufficient data to demonstrate
the enormousness of the diversion of resources that
the monetary expansion as a whole represents.
We will provide some data concerning the
TLTRO programmes later. Meanwhile, let us look
at, for example, the ECB’s own calculations on
the use of the Asset Purchase Programme funds,
based on the analysis of the banks’ balance
sheet movements (
Chart 7
).
As we can see, if converting these data into
quantified conclusions is complex, it does seem
clear that the transfer of these resources to
lending is only partial and minor.
The information repeatedly provided by the
aforementioned quarterly survey conducted by
the ECB among the European banks that tap its
resources leads us to the same conclusion. In
response to the question on the use made of
the funds received, only 30 % of the banks ac-
knowledged that the money tapped “has con-
tributed considerably” or “has contributed
somewhat” to boosting lending (
Chart 8
).
These data reveal, on the one hand, the visi-
bility with which it is conveyed that the resources
received from the Eurosystem are not allocated
to monetary policy purposes. On the other, they
also demonstrate the huge scale of this diversion
of resources in relation to the Eurozone’s mon-
etary policy as a whole and, of course, in relation
to the European economy as a whole.
The significance of the TLTRO programme
From the point of view of our report, the TLTRO
programme, based on “targeted” long-term
quantitative easing operations, holds particular
interest.
Chart 7.
Balance sheet movements of MFls other than the Eurosystem that correspond to the change in reserve
holdings between end-February and end-July 2015
Source:
ECB.