Interest rates will remain at low levels for the forseeable future and European central banks could continue using quantitative easing (QE) tools, according to a report by the Bank of Greece said on Thursday.
The report was presented by Dimitris Malliaropoulos, director of the Economic Analysis and Studies Department of the Bank of Greece, during a conference organized by the National Bank of Albania and the London School of Economics and Political Science campus in Tirana.
It was also noted by the report that European central banks must re-assess the benefits from preserving their asset portfolios at their current high levels. According to accumulated accounts of the U.S. Federal Reserve, the European Central Bank, the Bank of England and the Bank of Japan, central banks have almost quadrupled their assets since 2007 in their efforts to deal with a global financial crisis.
The report noted that the increase in the size of central banks’ assets has resulted in a permanent reduction of state bond interest rates by 250-330 basis points.