The Battle between the Market and the Planners

07.10.2016 • Central Banks

From the Southbank Private Briefing (Great Britain)- Central bank negative interest rate policy has crushed Deutsche Bank’s profit margins. And on top of that, the regulators are coming for it.

It’s hard not to see this as a battle between the free market and central planners. Which will get Deutsche Bank first: its own actions in the derivative, or the actions of people who by some magical coincidence know exactly what the price of money should be? I can’t answer that question.

I know what I’d prefer: if a bank has to go to the wall, I’d rather it was because of mistakes it made itself – poor choices it made with its own free will, punished by the market – than because of some power-mad central planner experimenting with interest rates and regulation. But who cares what I think?

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