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Monetary Policy, Financial Regulation and Financial Stability: A Comparison between the Fed and the ECB in the Wake of the Global Financial Crisis

  • Gunther Schnabl EMAIL logo and Nils Sonnenberg
From the journal ORDO


The paper discusses in light of Austrian and Keynesian economic theory the impact of conventional and unconventional monetary policies as therapies for financial crises. It reviews the financial market stabilization measures of the Federal Reserve System and the Eurosystem in response to the US subprime crisis and the European financial and debt crisis. It shows that stabilization measures both in the US and the euro area are based on Keynesian thinking, whereas longer-term consequences of financial stabilization measures tend to be neglected. It is argued that the Federal Reserve System’s crisis measures were more directed towards stabilizing the banking system, whereas the European Central Bank first and foremost focused on debt sustainability of euro area crisis countries. In both cases, household credit growth remained under control despite renewed monetary expansion, while new imbalances emerged in the banking and corporate sector as suggested by Austrian economic theory.


Das Papier diskutiert im Lichte der österreichischen und keynesianischen Wirtschaftstheorie die Auswirkungen konventioneller und unkonventioneller Geldpolitik als Therapien für Finanzkrisen. Es gibt einen Überblick über die Finanzmarktstabilisierungsmaßnahmen des Federal Reserve Systems und des Eurosystems als Reaktion auf die Subprime-Krise und die europäische Finanz- und Schuldenkrise. Es zeigt sich, dass die Stabilisierungsmaßnahmen sowohl in den USA als auch im Euroraum auf keynesianischem Denken beruhen, während die längerfristigen Folgen der finanziellen Stabilisierungsmaßnahmen in den Hintergrund treten. Es wird argumentiert, dass die Krisenmaßnahmen des Federal Reserve Systems auf die Stabilisierung des Bankensystems ausgerichtet waren, während sich die Europäische Zentralbank in erster Linie auf die Schuldentragfähigkeit der Krisenländer des Euroraums konzentrierte. In beiden Fällen blieb das Kreditwachstum der privaten Haushalte trotz erneuter monetärer Expansion unter Kontrolle, während im Banken- und Unternehmenssektor neue Ungleichgewichte entstanden, wie die österreichische Theorie nahelegt.

JEL-Codes: B53; E12; E14; E30; E44; E58; G10; G20; H30; H50


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Figure 14 Yield Curves. Source: US Treasury, Thompson Reuters. AAA ratings.
Figure 14

Yield Curves. Source: US Treasury, Thompson Reuters. AAA ratings.

Figure 15 Credit Margins. Source: Board of Governors of the Federal Reserve System, Freddie Mac, European Central Bank, Bundesbank.
Figure 15

Credit Margins. Source: Board of Governors of the Federal Reserve System, Freddie Mac, European Central Bank, Bundesbank.

Published Online: 2020-06-23
Published in Print: 2020-06-22

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