It’s hard to understand how central banks can favor so much safer biggies while making it harder for riskier smaller

Sir, Claire Jones reports “France’s central bank has bought bonds issued by LVMH, Bulgari’s parent company, helping lower the group’s borrowing costs. Under the terms of one of those bonds, LVMH can now pay an annual coupon of just 0.375 per cent to borrow until 2022. “Eurozone investment regains sparkle” October 5.

Unbelievable! How on earth can a central bank intervene and distort the allocation of credit to the real economy this way?

And to top it up, what is the capital requirement for a French bank when lending to LVMH or to Bulgari and what is it when lending to an unrated SME, that wishes to enter into the same market as these giants who can afford tens of millions of euros of investment?

Sir, is it only me that feels something is very wrong?

@PerKurowski