By Siobhan McFadyen | 14 April 2017
EXPRESS — One of Germany’s top bankers is warning the European Central Bank could be forced to introduce “sharp” rates rises sparking hyperinflation fears. And he says banks may be unprepared for the outcome of a spike which could cause wipe-out for the value of the euro.
Bundesbank executive board member Andreas Dombret issued a very targeted and stark warning to banks this morning. And he said risk managers should beware as most of them have never lived through a period of significant rates rises which can lead to hyperinflation.
Germany’s central bank has been lobbying the European Central Bank (ECB) to end its £1.95trillion (€2.3tn) bond-buying program known as quantitative easing, which has been active since January 2015, over concerns it is holding the country’s economy back.
Policy chiefs at the Bundesbank have directly targeted the bank’s Italian chief Mario Draghi over the programme which is allegedly saving debt-ridden euro states from default. …