So yeah, remember that weird kerfuffle from last week about how China’s top central banker was missing. Not true.He’s around and apparently he’s giving his US counterpart, Ben Bernanke, some lessons on conducting monetary policy.
According to iMarketNews, he was quoted as saying: “Zero interest rates may discourage banks from serving the real economy.”
He added that when a bank’s cost of capital is zero, so too is the pressure to lend into the economy.
We’re pretty sure that’s a slam on Bernanke, as this has been one of the criticisms of the Fed’s ZIRP policy.