A weekly section discussing how general events can influence the future of the cryptocurrency sector
Draghi Supports the Idea of Inflation
Mario Draghi insisted on introducing a new stimuli for the euro zone, saying the European bank must not stop their struggle to revive the economy. “We will do what we must to raise inflation and inflation expectations as fast as possible, as our price-stability mandate requires,” the ECB president said.
China: Central Bank Unexpectedly Cuts Interest Rates
The officials from the PBOC indicated further reduction in the interest rates in response to the worst bad loan inflation in nine years. The number of bad loans surged 10% in the last quarter, the largest increase since 2005. It is further threatening to increase in the wake of the free economic downturn and real estate market collapse.
Shadow Banking Reaches New High in China
The shadow banking in China – the whole loan originators operating outside traditional institutions – reached a volume of $75 billion, which has aroused the concern of many economists. As the system depends heavily on short-term financing, a financial panic is prone to generate an overreaction, which in turn could trigger a withdrawal rush in all banks.
Japan Gears Up to Battle Ongoing Recession
The world’s third largest economy Japan is currently going through recession, in the wake of which Prime Minister Shinzo Abe has announced to launch another stimulus budget. He called early elections amid growing doubts about the effectiveness of the measures being taken by his government. Japan’s public debt is already closing to reach 250% of its entire GDP.
Commerzbank Imposes Negative Interest Rates
Commerzbank recently decided to impose negative interest rates on larger deposits. The measure will affect major institutional clients, but will remain ineffective to a regular saver. Germany’s second biggest bank has taken this decision in response to the ECB rulings of charging an excessive annual interest rate to maintain reserves.
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