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Storms ahead if monetary losses turn political
The rise in Europe’s populist parties, underlined by this week’s far-right election win in the Netherlands, further exacerbates central banks’ political and public relations problems over their weakened balance sheets. The far right’s surge, with anti-Islam, anti-euro Party for Freedom leader Geert Wilders favourite to become the next Dutch prime minister, makes life more difficult for central banks for several key reasons. It concentrates the spotlight on policy mistakes by largely independent central banks contributing to an unpopular mix of high (though now diminishing) inflation and high interest rates. ... (full story)