Why Europe is scared of quantitative tightening
It risks worsening the continent’s divides
Central Banks are finally getting into the swing of quantitative tightening (qt). The Bank of Canada has shed a fifth of its balance-sheet this year. The Bank of England held its first gilt auction on November 1st. The Federal Reserve’s balance-sheet shrank by $85bn in October, twice the size of the reduction three months earlier. But in Europe, where officials have flirted with qt for months, the European Central Bank (ecb) is yet to let go of a single bond.
This article appeared in the Finance & economics section of the print edition under the headline “Frightening tightening”
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