What the ECB Can Do Beyond a Rate Cut for Coronavirus Stimulus

The video discusses the ineffectiveness of interest rate cuts in addressing health crises, emphasizing the need for alternative economic policies. It highlights the use of dual interest rates and the TFs scheme by the Bank of England to support SMEs. The video also suggests capping bond yields to aid fiscal policies, drawing lessons from global examples.

Why are rate cuts considered ineffective in addressing the current crisis?

• They are only effective in financial crises.

• They increase inflation.

• They do not address the root cause of the health crisis.

• They are too slow to implement.

What is the primary purpose of the TFs scheme?

• To increase government revenue.

• To provide cheap loans to banks contingent on new loans.

• To stabilize the stock market.

• To reduce inflation.

How does the TFs scheme support SMEs?

• By offering tax breaks.

• By providing government guarantees for loans.

• By reducing export tariffs.

• By increasing interest rates.

What is a key recommendation for the ECB to support SMEs?

• Increase taxes on large corporations.

• Reduce government spending.

• Cap bond yields in the Eurozone.

• Increase interest rates.

What is the role of fiscal authorities in the proposed economic measures?

• To reduce government debt.

• To guarantee credit risk.

• To stabilize currency exchange rates.

• To increase interest rates.