Europe is lagging behind in balance sheet reform after the crisis, compared with the United States, and in my view lending to the real economy will only return to the levels at which we want to see it if we have clean bank balance sheets.
Arguments against what we are doing There are many who believe we are totally misguided in our actions. Let me focus on four criticisms. First, we focus on the wrong index of inflation. Second, we have killed private investment by keeping rates too high. Somewhat contradictorily, we are also hurting the pensioner by cutting rates too sharply.