This is an amazing article from Les Echos headlined “European Authorities Warn of Risks to Financial Stability”.
Indeed, know that, and I quote, “the European Systemic Risk Board (ESRB), chaired by Christine Lagarde, issues a ‘general warning’ on the financial system in the face of skyrocketing inflation and oil prices. An unprecedented position in twelve years.
“The risks to financial stability in the Union and the probability of extreme risk scenarios materializing have increased,” he said at the end of a meeting held on September 22, even before the storm in the markets unleashed by the new British Government, the conclusions of which were communicated on Thursday night.
You have to pinch yourself to believe it anyway.
Central banks are raising rates at a time when energy prices are so high that a rate hike is economically suicidal and, at the same time, we are not solving our energy price problem by changing, for example, the standards currently in force in Europe.
Raising rates doesn’t fix pipelines.
Raising rates doesn’t bring in gas or build nuclear power plants.
The central bank creates the conditions for the crisis, and also has been shouting from the rooftops “beware that there are going to be problems” and the media collect this information without questioning or debating it, or contextualizing it.
The reality is that central banks create crises.
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Source les Echos.fr here