How Europe's deficit obsession turned bankers into stimulus fans

The European Central Bank's wild experiment with negative interest rates has bankers in uncomfortable territory

Christine Lagarde.
(Image credit: Illustrated | REUTERS/Francois Lenoir, Aerial3/iStock, Wikimedia Commons)

Generally speaking, bankers are not fans of government deficit spending.

Mainstream economic thinking worries that deficit spending will create inflation, and inflation eats away at bank profits. Increased deficit spending also often means the government is directing more of the economy's overall resources, leaving less activity for the private banks to direct.

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Jeff Spross

Jeff Spross was the economics and business correspondent at TheWeek.com. He was previously a reporter at ThinkProgress.