What's the Difference Between 'Financial Repression' and 'Macroprudential Regulation'? - The PolyCapitalist

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What's the Difference Between 'Financial Repression' and 'Macroprudential Regulation'? 0 comments

Jun 30, 2011 10:22 PM | about stocks: TBT, TMV, TLT, TIP, GLD, SGOL, IAU, EUFN

The most striking remark made by former Bundesbank Chief and ECB frontrunner Axel Weber in a recent WSJ interview were his comments on the possibility of using financial repression to solve the Greek and wider European debt crisis:

“Ultimately, there will be a debate about financial repression. Take what we had in Germany — the Zwangsanleihe [compulsory loans introduced after World War I to help make reparation payments]. If voluntary contributions don’t add up, then the one tool that is still on the shelf is financial repression.”
To my knowledge, this is the first time a major senior policymaker (albeit one who recently stepped down) has publicly used the term 'financial repression'. As economist Carmen Reinhart and others have noted, the policies associated with financial repression are typically couched under the more benign, positive sounding 'macroprudential regulation'.

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Themes: Financial repression, Axel Weber, Macroprudential regulation Stocks: TBT, TMV, TLT, TIP, GLD, SGOL, IAU, EUFN

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