Schaeuble: central banks can't solve all problems

German finance minister stresses limits to what central banks can do against economic problems

Associated Press

BERLIN (AP) -- Germany's finance minister says there are limits to what the world's central banks can do to solve economic problems and warned of too much money flooding financial markets.

U.S. and Japanese authorities have already cut their interest rates to near-zero. This month the European Central Bank cut its main rate to a record-low 0.5 percent. However, there are still companies in parts of Europe that are struggling to borrow at reasonable rates.

German Finance Minister Wolfgang Schaeuble said Thursday that even zero interest rates wouldn't help company financing now and that monetary policy can't solve the problems that need to be addressed by politicians through economic reforms.

Schaeuble said the ECB is doing its job well but warned of the "placebo" of too much liquidity from the world's central banks.

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