"The recovery will not move in a straight line," warns economist Werner but notes the Bank of Japan is doing all it can to stimulate credit creation and increase money supply to ensure a strong recovery.
During the recent financial crisis, the Fed created numerous extraordinary programs designed to stimulate credit.
The Fed said in a statement that it would begin to buy large amounts of short-term debt in an effort to stimulate the credit markets, which have all but dried up.
By keeping the worst in business, they avoided the pain of closures, but at the cost of condemning better banks to meagre profits for years.The authorities are also desperate to stimulate bank credit.
So I would like to see any and all money for any stimulus package be used to stimulate bank credit.
"Normally when the Fed cuts rates, it stimulates demand for credit and housing," Mr. Metz said.
"We will see some targeted measures to stimulate growth," said Credit Agricole CIB economist Dariusz Kowalczyk.
Current low interest rates stimulate demand for credit, and this bank, with an established retail network, already owns 40% of the nation's mortgage business.
If it were true that lenders will always go with the flow, then artificially low interest rates should stimulate borrowing, increase credit and facilitate economic growth.
