The European Central Bank’s massive bond-purchase program and other easy-money policies probably haven’t worsened inequality in the eurozone, Germany’s Bundesbank said on Monday, hitting back at concerns that central banks are taking on an increasingly political role by redistributing wealth.
In a report, the Bundesbank argued that while recent ECB policies have helped bolster stock and property prices, they have also supported economic growth and employment, thereby helping poorer people.
“It seems very doubtful that [the ECB’s] special policy measures of recent years have increased inequality in an overall context,” the Bundesbank wrote.
As central banks from Tokyo to Frankfurt make ever deeper interventions into financial markets, a debate has broken out over whether central bank policies are helping one part of society-wealthy stock and bondholders-for instance, at the expense of everyone else.
Monday’s report marks the Bundesbank’s latest effort to defend the ECB and its independence amid concerns voiced by politicians that years of ultralow interest rates are hurting savers and pensioners.
Recent ECB policies, including negative interest rates and ?80 billion ($89.26 billion) a month of bond purchases, have sparked criticism across a swath of German society, including politicians, businessmen and bankers.
In this fractious debate, Bundesbank President Jens Weidmann-a longtime opponent of the ECB’s bond purchases-has emerged as an unlikely ally of ECB President Mario Draghi. Speaking in southern Germany on Thursday, Mr. Weidmann gave a measured defense of the ECB’s ?1.7 trillion stimulus, which he said could help create jobs and boost tax revenues.
“Citizens as a rule aren’t just savers, but also workers, shareholders, taxpayers or property owners,” Mr. Weidmann argued.
Mr. Draghi will travel to Berlin on Sept. 28 to address German lawmakers, his first such visit in four years, in an effort to defend the ECB’s policy measures.
In its report, the Bundesbank said earlier academic studies hadn’t sufficiently considered how central bank policies impact the broader economy through numerous channels, or the counterfactual case in which central banks did nothing.
“Research in this area is still at a very early stage,” the Bundesbank said. “Not just asset prices should be considered, but also delayed effects through changes in the labor market.”