Until the financial transmission channels are repaired, BoE’s monetary injections are wasted

Sir, Chris Giles hold that “There will not be a better time than now to spend some of the BoE’s monetary policy credibility in search of a more robust recovery”, “Carney has a chance to kick-start the weak British economy” August 1.

Wrong! Anytime after the financial transmission mechanism, demolished by capital requirements for banks based on perceived risks that have already been cleared for with other means, has been repaired, is better.

Meanwhile any monetary injections would mostly flow to dangerously overpopulate the havens officially considered as safe, and too little would flow to the risky actors of the real economy who most stand a chance of knowing what to do with those injections.