In the September edition of Financial Insights Prof. dr. Clemens Kool outlines his vision for the monetary policy.
Six years have passed since the bankruptcy of Lehman Brothers marked the start of a global financial crisis. The acute phase of the crisis may be over, but the recovery of economic growth in many countries is proving slow and hesitant. Many people say a dysfunctional credit market is to blame for the lack of a stronger pickup in the economy.
Credit growth has clearly been weak for many years, but it is not immediately obvious where the bottlenecks are in the granting of credit. Are they due mainly to a lack of demand for credit in the private sector, inadequate supply by the banks, or both?
Can and should the government do something about it?
In his paper Prof. Kool turns his attention to the factors that play a role in the supply of and demand for credit, focusing primarily on developments in the euro zone in general and in the Netherlands in particular and paying special attention to small and medium-sized enterprises. He shows that there are no simple solutions: recovery is a long-term process.
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Capgemini Financial Services offers, in cooperation with Prof. dr. Jacques Sijben and Prof. dr. Clemens Kool, quarterly a view at the current development at the global financial world.