Fighting capital flows in the orbit of the ECB

London

TO limit currency appreciation and generate inflation, some central banks in Europe but outside of the euro zone have turned to unorthodox monetary policies.

Denmark, Sweden, and Switzerland have all adopted negative policy rates. Sweden, in addition, has bought bonds in a quantitative easing (QE) programme. Denmark and Switzerland have intervened directly in the foreign exchange markets to weaken their currencies. Sweden has threatened to follow suit. The moves have only partially calmed capital flows.