Last year, the total number of German institutions fell by 72 to 1,888 – that’s 3.7% fewer banks, which is not exactly a small number. While the decline in savings banks was not quite so serious, at 2.4%, it was still significant.
The sceptics’ reasoning is two-pronged. First, that monetary policy is not sufficient to address the present low growth trend; and second, that monetary policy is increasingly ineffective in any case. The notion that monetary policy alone cannot raise trend growth is mostly true but trivial, especially if the challenges of secular stagnation highlighted by Robert Gordon in his brilliant new book are considered.