Central Bank Follies – QE, Negative Interest Rates And Regulatory Capital

Central Bank Follies – QE, Negative Interest Rates And Regulatory Capital by Michael Sonenshine, CEO at Symfonie Capital This post is long.  It is a compilation of posts on each topic. I’ll get to the bottom line up front. Quantitative Easing (QE) keeps banks liquid, but does little else for the broad economy. If anything, it incentivises banks to buy government bonds (and soon to be high grade corporates) rather than focus on core lending activity. Sub-normal and now negative interest rates distort asset prices.  Investors are crowded out of low-risk assets and crowded in to higher risk assets, all…