Is it really worth it? That’s the question that many banks in Europe are asking after the European Central Bank last week launched a massive and historic quantitative easing program to buy government and private bonds.
It is the latest sign of cracks forming in the once-invincible veneer of a central bank. Bankers and markets in Europe are asking themselves: Just how much control does a central bank really have over the path of the economy?
Even many critics of the ECB’s new €1.1 trillion bond-buying program concede that the Frankfurt-based institution has had no real choice in the matter – it must do what it can to prevent debilitating deflation and boost Europe’s anemic growth.
But at the same time, many bankers around Europe fear the stimulus program won’t be worth the effort.