Promises – but what can banks do?

SINCE the President of the European Central Bank, Mario Draghi, said two weeks ago that the bank will do "whatever it takes" to save the euro, the markets have been gearing up for more quantitative easing.

While the US has since 2008 conducted QE1 and QE2, and the UK has been conducting "ongoing QE", the European bank has so far resisted. This is because full quantitative easing in Europe needs a treaty change, as there is a German ban on monetisation of government debt by the ECB.

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