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Is the ECB really that much of an outlier?

Summary:
The last time German inflation was as high as it is now, in June 1992, the Bundesbank’s benchmark lending rate, the Lombard rate, was 9.75 per cent. Today the European Central Bank, the Bundesbank’s successor, is charging banks in Germany, as well as the wider eurosystem, zilch. A lot has changed since the summer of 1992. Twenty-nine years ago, the unified German state was in its infancy and monetary union was yet to be born. It is, according to a note out Tuesday from research outfit Laburnum Consulting, the latter of these two changes that does more to explain why the gulf between rates then and now is so vast. As we enter 2022, the ECB is breaking with another tradition. For the first time in more than a decade, policymakers in Frankfurt are mapping a different course to that

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The last time German inflation was as high as it is now, in June 1992, the Bundesbank’s...

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