Jury Is Still Out on Brexit's Data Impact: Wolfgang Bauer

The video discusses the Bank of England's cautious approach post-Brexit and the European Central Bank's (ECB) decision to maintain its current policy stance. It explores the potential impacts of further negative interest rate cuts on the economy and banking stability. The ECB's corporate bond purchase program is examined, highlighting its flexibility and potential adjustments to increase bond eligibility.

What is the current stance of the Bank of England and the ECB regarding economic policy post-Brexit?

• They are increasing interest rates.

• They are on hold due to unclear economic conditions.

• They are reducing their bond purchasing programs.

• They are aggressively cutting interest rates.

What is one reason the ECB might avoid further interest rate cuts?

• It could lead to higher inflation.

• It would increase government debt.

• It could strengthen the euro.

• It might destabilize the banking system.

What is a potential consequence of the ECB cutting interest rates further into negative territory?

• It might lead to a stronger banking system.

• It could boost the stock market significantly.

• It would automatically increase the GDP.

• The impact on economic activity could diminish.

What flexibility has the ECB incorporated into its corporate bond purchasing program?

• They only purchase bonds from government entities.

• They allow for a wide range of credit ratings and maturities.

• They have strict credit rating requirements.

• They only purchase bonds with a maturity of 5 years.

What might the ECB do to access a larger eligible bond universe?

• Increase the interest rates.

• Lower the yield floor.

• Restrict bond purchases to high-yield bonds.

• Limit purchases to short-term bonds.